welcome to Chicago founder stories here in 1871 Chicago's digital startup hub we have a great and very accomplished con generate Tom saw snuff founder of tastytrade founder of thinkorswim so great to have you here thanks thank you and we have Tom's bottle hood we'll be answering questions as well peace please specify the questions for Tom or the bobble head so Tom you obviously have a great story but not everyone may know your market so maybe just tell people the one-minute version of what thinkorswim was just just as a company so they would know it and then your current company tastytrade what it is and we'll come back to it but it's a the context they know you're successful but they may not be customers what would that be sure so I guess you wanna be looking to you right yeah you do this yes okay whatever works I'm not sure with the cameras um but that's you right there perfect so he doesn't show so he's very conscious of it he's a pearl I'm an integer so I'm still shaken up over the introduction you see cuz I'm so just people that don't know or haven't met me before haven't listened I've been on the road for 17 straight years now and when I say on the road all I do is speak so I speak at events mostly I do my own stuff and I had this special rule no introductions I just come up I tell my story I've got a whole pit you know it's just a whole discussion and someone Christie said I'm doing the reduction p.m. like oh this is not going to work and and of course she she pulled it off somehow anyway um you know we had this we had this idea years ago that something was messed up with finance and we like the consumer side of the business so to put it in a nutshell we're just kind of advocates for for consumers when it comes to finance we never really knew what we were doing or what like like we never tried to solve a problem we never set out to to accomplish something specific we just said we're going to change technology we're going to change content and we're also going to do a few other things along the way like products and things like that and we'll see where it falls and that's it at it and the so those who didn't know think how would America described it when they bought it for such a large 70 million dollars what what did they describe the business and why they were buying it everybody that ever described thinkorswim - every time we tried to describe thing or some to anybody at any time anybody ever put money in it the first thing they would say to us is this is probably the worst business we ever bought and so so I always got the you know everybody was always trying to play down the value of stuff in fact I don't know if I told you this story but first time we ever raise capital for four thinkorswim we were pretty young company we're only about four years old and Christy had just joined us as our CFO and we sat around with a private equity firm TCB technology crossover venture time and they give us twenty two and a half million dollars and on a hundred million dollar valuation now we're just a bunch of floor traders from from the SIBO in a prior life and we had rolled all our money over the years into this thinkorswim venture and we sat around this conference table at our first board meeting and volatility was really cheap over that summer and we sat around they give us the money in like April and it was probably June expiration it was really quiet and there's nothing going on in the markets and we sat around the table and they said hey this is after they'd written us a check for twenty two indefinitely dollars but we never cashed the check because we didn't need the money we were profitable already we just thought we were raise money when you can was always the rule among kind of you know well I thought the rule was among entrepreneurs so we sat around the table and they kind of said they looked at each other two partners at this private equity firm look at each other and said this is the worst company we've ever invested in the honeymoon quite honey but this is our first board meeting it's the worst company we ever invested in I can't believe we gave you a hundred million dollar valuation now the cool thing for us was that we never cashed the check and we don't like these guys anyway because they were just miserable you know sob sand the whole deal so so we said later we'll find out how they invest in a second company yeah so we said so she said you know what we're gonna do something that nobody's ever done before we're going to give you your money back they said we'll take it and so the first discussion we ever had at our first board because you're saying what do people think of us we said we'll give you their money back - whatever brokerage fees you know investment banker fees they had and they said fine we'll take it and we thought that they were bluffing and they thought we were bluffing but we weren't bluffing and and nobody was bluffing and so we kind of like got to the point of writing out the check and then they're like they're like now I think we'll I think well let us think about this for a little bit longer and so they had this public meeting where they were talking to each other in front of us like you know how sometimes you talk about your kids play you're talking a lot enough to everybody so that's exactly what they did in front of us and one partner sets the other partner do you think this is the really the worst company we ever invested in and and the other guy looks at him he says no I think Netflix was worse than these guys they had put like 50 million dollars into Netflix they were the first investor so so you know and just to show you how nobody knows anything that's the whole nobody knows anything story because they ended up selling yet they made ultimately they made you know I don't know eight or nine times their money on us and they made I don't a few billion dollars easily on Netflix so and then they invested us again the second time around so and when TD bought thinkorswim they said the same thing they said you know they set us down they said listen we you know your software is okay your name stinks we hate it we're changing it tomorrow and and your customers aren't as good as you think they are nothing then we're like well why are you buying us really well because we lose all our customers to you guys yeah so originally they thought they could if you can't if you can't be you know we just will just out build them and then they found out later on we can't really do that so they ended up buying us and I'll say a funny story Pat they they tried at first they said we hate the name thinkorswim doesn't fit our model we're TD we're TD Ameritrade we're TD Bank the whole deal none of this fits our model so we're going to change you we're going to change the name to the ultimate trading platform and I this is true story the ultimate trading platform was then they go because we can't stand the name so so I looked at the sea and I go dude don't do that okay people love the name thicker some and they love this company if you changes the ultimate trading platform they're all going to leave now they don't like that name this is kind of we built something special they said well say higher they said I will see so they hired a consulting company to go out and see which brand was more valuable TD Ameritrade the traders or thinkorswim and it came back ten to one in favor of thinkorswim over TV merit trade customers and so they said that's got to be wrong they spent another million dollars trying to figure out those numbers were right they came back again and said it's closer to 95% and so they said okay we'll keep the name so today it's 50% of their transactional business Wow 50% transsexual so they're the largest transaction firm in the world when it comes to the number of trades made fifty percent of it is done on this bar over fifty percent some of the platform and ninety I would say their business went from 9% derivatives to 56 57 % derivatives just since they introduced a platform so they've completely changed their whole business around site it's really it's incredible story now it's amazing that you built that and it's a I like the going against you know the adversity kind of conventional wisdom wrong every time and you're a pretty good pretty good company with Reed Hastings and Netflix there yeah we'd like to be them so let's go let's go back to the beginning so you're not a Chicagoan but you've lived here a long time 36 years so where are you from originally tell people a little bit about you know you as a as a youth for the youth as a youth I see where he's from I grew up outside of New York City in a place called White Plains I grew up I was born and raised in New York in New York City my mom was a grad student at Cologne yeah and then we moved to the suburbs and and we lived you know I stayed there until I moved to Chicago I guess so I grew up just outside of New York City about 20 miles and you know we talked a little bit about your parents were what were they doing what was your my you know young life like what my mom my mom was an artist and she had an art school for girls only and she did that for 55 years so she was a she ran her own business and then my dad was a professor at Yale Law School and also a labor lawyer so you really have a lot of academic in your background so growing up what what were you thinking you do like what did what did you like to do what he's enjoyed to do and what as you thought about your future did what influenced you well actually I was really concerned about that because my family was so academic and I wasn't and so I was a little worried I think I told Pat the story when we were prepping for this today but back when I was I just turned 60 so so I've been doing this I've been in Chicago for 36 years and I've been doing this for 36 years but when I was 17 and my little sister was 15 my parents set us down on the couch in the living room no parent ever do this day and my parents were were bright and they were you know they were part of academia and the whole deal they set us down we said they said we only have enough money to send one of the two of you to private school and we chose your sister so they're like they're like we think it's not that we don't love you it's just that it's just like we think that she will use the money better than you and I was like I was like that made that makes sense now if you try to do that today you kids do you my pit you know I was cool with it so I went to stay cool and I went to SUNY Albany which is in Albany New York obviously and it's the state system in you know in New York so you get out of SUNY and you go to Manhattan tell us about where SUNY I get a job with drexel burnham which is no longer around but I was the firm at the time was the firm and I was there for nine months met a bunch of guys that said if you why'd you go there because it wasn't the academic rap because they offered me a job that I mean the reason when you're 20 remember I graduated college in 1979 in 1979 was the middle of kind of ugly recession interest rates had just they just crossed up they just got over 18% short term rates and they were on their way to 20 percent there was no jobs and so it was an ugly recession and they were you know I was part of that day me baby boomer era so when I got out of school you know if you got a job offer but I win it but you got a job at the hot one of the hot firms in the world right whether that was it was it there at that time oh yeah no they were they were a great firm it was totally just stupid blind luck I said something you know some have this theory well I shouldn't say I have it I didn't know if I had it then but my entire career I've tried to do say things to differentiate myself and like I did a speech on Monday afternoon and I talked to a bunch of masters students at IIT and and I talk about differentiation because everybody's smart and so how do you differentiate yourself from everybody else you need some kind of story and some kind of it's not really actually a story need some kind of logic that makes sense because if you assume that everybody's smart and almost everything you do which we do and we challenge people actually then you can challenge your interviewer intellectually with a logic chain and we try to do that with everything that we do you know so you think back to getting the job on Wall Street Hill warmed up top firms do you remember how you pulled that up how I pulled off into the job yeah well I just went mean somehow I got I don't even know like you knew your strat your Jedi Mind Tricks worked whatever I mean I might have been the right day in the right place you know so you're there I didn't bribe them I didn't have any money so they're at that place between Wall Street making good money now no well when we when I get out of school the the the average starting salary for Wall Street for entry-level was $25,000 because I remember that was my first deal 25,000 bucks so you're you're working there you're in the training program training program and but you end up in Chicago at the end of this chapter why tell it tell us a little bit about how that happened tell ya funny so I got my first job and I'm all excited because I'm working for a big firm they're you know they're putting us up in hotels they're flying us around they're training us it's really interesting and I meet these two guys and they're about 10 years older than me and they called me aside one day and they said we want to leave this firm because they suck and even though I thought they were great because I just got there so now on this 22 year old kid I'm completely confused these guys are telling me they think and I'm thinking it's the greatest firm in the world so they said we're going to give you an opportunity that that you that's unbelievable because you're you're you're 22 or 23 I don't remember 23 maybe and you're single and if you move to Chicago to trade on the trading floor we'll put up the money which at the time they put up $50,000 they offered $50,000 and remember I only had about $1,500 I had about 15 heard ours to my name but in my first six months at Drexel I had made 400 trades through their platform they didn't have a platform was over the phone so I traded more in the first six months at Drexel then the entire than their entire workforce did so they had about a thousand employees and my 400 trades were the most everybody I think it'd be added them all together why was that because I don't know I was turned out as a junkie I don't know so I have no idea I just bit into this whole thing and and so lira fanatic and they know it they're like we're this our phonetic how do we get him to represent us so they go so one of the guys borrowed $50,000 from his father and said if you if I take a fifty thousand to Chicago and trade on it they I would fill some orders for them and then I would trade for myself I had no idea what it meant I took a flight to Chicago one day freidy's what is it that you think made them so excited about that opportunity I have no idea when you get is it and why it's sort of a random thing to say yeah hey by the way I'm not really my job but you should leave your job and I'll write you a big check to go do this they didn't have any friends yeah they were clearly outcasts is it they were like you know I don't I have no idea and I've never even talked to them since so here's the great thing that's the trader for you so I hop on a plane come to Chicago I had never been west of the East River you ever see those come ever see those New Yorker where they have a big picture where everybody in new york thinks the world ends at the East River which is basically what surrounds Manhattan I had never been west of there ever anywhere so I came to Chicago I had no idea where I was I'm 23 years old the time reasonably smart but not you know not academically smart street smart and I end up in this city and I hadn't knew nothing so somebody said you got to take a drive up Lakeshore Drive so I've paid this so I'd go to the cab driver I want to take a drive up Lakeshore Drive but I'm from New York I'm skeptical so I said the guy I'm going to give you 50 bucks to drive me up and down Lakeshore Drive just one time I want to check it out but I don't want to be on the meter put a piece of tape on the meter that guy goes not it goes it'll be less and I go no no I heard I heard it's like a lot of money so I paid him 50 bucks and he put a piece of tape on the meter and he drove me up and down Lakeshore Drive when we got back to where he dropped me off I got he goes do you want to see I go yeah just for the hell of it let me see what it was because he had leave the meter on seventeen dollars my first bad trade so what'd you talk about the first time you went to the trading floors got on it walked the trading floor they knew somebody he was a lawyer for he was he never practiced but he was a kid that went to NYU Law School got his law degree but never practiced came to Chicago I met him on the floor just to say hi because he was gonna walk me around and he said I walked on the floor and I never turned back I walked on that floor I was like I'm never leaving this place it took me less than 60 seconds to know this is the coolest thing I remember this is 1980 and so people probably can't all picture this so Jeff paint the picture for everyone 1980 it's a bunch of crazy huge sweaty guys screaming and yelling and I had no idea what was going on and it's just complete chaos and it for some people that just resonates in a resume with me and I didn't exactly know what's going on I had $50,000 that I in an account the guys that back to me lost the $50,000 two weeks after I got there I had made $13 so I had a $13 left over and they lost all 50 grand I had no money no job and I had paid rent for one more month and that was it so I was totally that's it so how did you bounce back I it's great you know you scramble i scrounged around found a job working for somebody i borrowed $100,000 from somebody else that i met and and i was one of the survivors you know there's about five to five three to five percent of people survive down there I was one of those guys that's all well you go from 13,000 $13 to the art to borrowing $100,000 I've seen some high buckle dennah it's just you got to have a good story you have the same you know somebody once said when we were when we were buying a company we were raising money and we've done a lot of deals over the years Christina I've done more than a you know handful of deals and they said it's harder to do a deal for you know $10,000 it's do a deal for ten million dollars so and I think for raising money was the same thing if you ask for ten thousand you'd be lucky to get five thousand if you ask for a hundred thousand maybe get a quarter million I don't know right so you see not only do well but the world starts to shift at some point in terms of technology talk a little bit about because this leads to your transition to figure some talk a little bit about that world was shifting what you saw and how that evolved into papers for sure well for those of you that don't know much about listed markets before before the dot-com boom of nineteen and a lot of you were young so so this was going to go back to like you're you were small but the the before the dot-com boom of 1998 to 2000 the markets were very inefficient and there wasn't a lot of technology everything was done kind of over the phone or on paper and and nobody had really kind of changed the industry and as soon as we saw the world kind of changing and his poor traders you sensed everything you're always skeptical of every everything and and we realized really we realized very quickly that the whole business was going to change in a very short period of time as everything went electronic and everything became dualist and everything else so after this is almost 20 years on the floor for me which means you stand in a very little spot then you grind out hell of a living but it's you know we saved a lot of money and we built a we built a 50-person prop firm so and we managed a half a billion dollars we had built the nice business for ourselves and I turned to my partner Scott at the time and I said let's do something different because you know I'd spent 20 years to us and he goes what do you wanna do and I'm like I want to do I want to build a completely different company I want to build technology it's time that we retooled ourselves now the cool thing about this and this is what I like to tell people everybody here this I'm in my 40s now so I'm like 42 43 and we took everything we had at the time which was substantial by substantial let's call that and we didn't even tell our families and we rolled the dice and invested it all you say that again yeah you didn't even tell your families yes you have to lie sometimes yeah it's important you know you come home you're like honey what're you doing do just the same old same old well we're starting a new company but don't worry it's not risky it's not risky and it's not our money but it was all our money and so of the money you've made over the twenty years how much did you put in the company 100% 100% 100% so but we had been lying for years to our spouses and to our family about lists about about how much money we were making because we always tell them we lost money every day because that's how you survive so so so so no we won't send a link to your wife yeah so nobody believed us anyway but but we did roll everything that we had saved up over the prior 20 years Wow because we thought thinkorswim would take you know a lot of money to start we also were able to raise some money we were able to raise some money with a law with some of the people that we manage money for so we were able to raise another you know we got a commitment for 10 million dollars we actually only took five million and then we ended up buying them out right away so we actually never raised any money right away but we had a commitment for money so people liked our idea so tuck talked about what the idea was and specifically what the market needs you saw we don't do things so here's one of the neat things about I mean I don't know if it's unique to us but we don't do things based on market need we don't solve problems and we don't do things based on market need most entrepreneurs that try to solve a problem or do things based on market need fail so what we do is we try to follow a vision that is something we think we want you don't I mean it's just it's we have our own little ideas about the way things should be and when we decided to do thinker some this is a fun story we thought the markets were a little bit saturated and we were going to build a platform for options on anything we built a model that let us figure out implied volatility on anything so you want to apply volitans down this couple of I see on your glasses on this iPad whatever it is we built a model let's figure out implied volatility which meant that we could create basically a way to execute clear and write derivatives against any single any single product or collectible or anything else so we called it options anything that was one idea we had the other idea we had as a backup was to build a brokerage firm as soon as we got knee-deep into building technology we realized okay we have to go with what you know with what makes a lot more sense so we decided that we're going to solve we're going to solve a problem that we had which was route we love trading but we had no way to route orders electronically through a front end that that that did the things that we wanted it to do and so we built that so we went around we learned about technology but from our perspective from our side we were just traders so we did know anything about technology so one of the one of the fun things about our story is that we basically built a technology firm and learned how to talk the talk but we never learned anything about technology we just went out we took an approach or we said we don't know anything about technology so we need to find somebody that does and that's really hard to do in the middle of a dot-com boom 1999-2000 there wasn't a single technologist around so we hung out at coding competitions they used to have things like top coder and and Google would have competitions and Microsoft would have competitions so we hung out these coding competitions and we met these like 20 year old or 18 year old Russian kids and we said what are you doing for the rest of your life they're like nothing we're like okay let's let's do business together so we started a company in Saint Petersburg with four people today they're the largest fin tech development firm one large spin tech firms in the world with about 450 developers we started him with four Russian kids in a garage and they basically built thinkorswim they lied to us and said that they knew how to build financial technology and we lied to them and said we understood technology so the first fun part of the story is one of the first things we did when building thinkorswim we had to we had to back then you needed to have servers so we had no test servers and we couldn't there was too many rules about you couldn't buy Sun Microsystems equipment in Russia so we smuggled servers into Russia in suitcases so we could build a test environment so we could test thinkorswim before we actually launched it and then we launched thicker some it turned out to be the single best online brokerage platform in the world for about six or seven years and it was an amazing company so how did you get that early tech advantage what do you attribute that to a lot of luck and you know the I attribute almost all of our success to one kind of and this is kind of a theme that runs through everything we are very quick decision makers and if you've been around successful entrepreneurs the one characteristic that every single industry or every single really successful entrepreneur has is they can make a decision doesn't matter if they're right doesn't matter if you're wrong whatever it is just make a quick decision make a damn decision and so we have been from the start very good at making decisions because of our trading background so if there's anything that you know we made a lot of bad decisions but but obviously we made more good decisions and just quick quick moves at it and assume quick course corrections to quick course corrections yeah sure we're we're very comfortable you know we probably made a million trades in our life and if you think about it at least a few hundred thousand of those are losers so we're pretty good yeah yeah so talk a little bit about how you get early traction I mean it's you know the thing about the dot-com boom was there are lots of good ideas but I think it didn't take off so a lot of good ideas didn't take off a lot of visions that eventually were successful didn't take off so what did you do different it's a great question and remember we started this company thinkorswim in 1999 we launched it in 2001 it for those of you that remember markets in 2001 we're in the middle of a meltdown the Nasdaq was crashing it had gone from 5,000 all the way down to 1,000 it was in the middle it dropped 80% firms were firms were selling off assets left and right everybody every almost every connectivity provider every Colo facility was going out of business it was a nasty time but again we didn't care because that's where contrarian so the best time to do everything is when everybody else is imploding he talked just for a minute he said something kind of important there that I'd loved it unpack if you don't mind started 99 but you launched in 2001 so what what do you do between 99 and 2001 build with technology really yeah ever get a little nerve-wracking that you've got a lot of money going out and not yet and they come in sure every day day and night but your wife so you came home and said we got a big order today we got a big why everything was great that's a long time to keep the morale up well she stopped talking to me in 1999 so then by 2001 it was like okay you know so so you get out there two years of Technology those that's a huge bill it's a it was about it was a little less than 18 months Wow yeah it took us a while to write the requirements we weren't stable for three years I mean it took a long time back then to be with the technology we built this year we built the fastest platform in the industry in less than a year and we have been we have had 100% stability and were the fastest platform so we've learned a lot over the last 17 years but in 2000 you know we were still we were still learning we didn't you know you kind of cross your fingers and hope you weren't down so this is a little different market the options market that a lot of others and that's very you can very much focus on ID so they're about a half-million targetable users sure with that so you had other companies you are competing with around the country you've got a local company here options expressly Eric we had David on and so tell us a little bit about how you sort of crack the code on those early users because for most entrepreneurs who watch this kind of thing they feel like I have a great idea have a great product but getting those users is hard you were very creative talk a little bit about how you aya slayed that dragon two recommendations for people out there that are interested in you know they really love entrepreneurship and building businesses one never be afraid to make a deal and and second never be afraid to dilute and take money and and a lot of people like oh they really get concerned about you know ownership and size of the prize and everything else we didn't care about it that stuff we thought if we were successful everything will take care of itself so every time we had an opportunity to make a deal to get better we did one of the first things we did was make a deal with a small education company that we knew they were snake oil salesmen we knew they were they were sketchy and everything else but we needed to learn the customer side of the business so we basically I went on the road in 2001 and I haven't come home you know it's been 17 years so let me unpack that for a minute here just want it so part of they did a bunch of business deels yes and and is that how you got the early users like how would that work if you were to sort of generalize what you did and be what was attractive about these firms and what made those deals work in terms of getting they were like investment education seminar companies and when they have an update an audience they had an audience they would spend a lot of money and they'd sell up sell people on you know classes on some kind of we were learning the whole thing at the prop at the time too we didn't really understand it and so we it's part of what ultimately inspired us to build tastytrade but was was just we hated the state of investor education and we wanted to completely change the world of content but did you learn just learn from them or did they actually get you users no they actually got a scissors so a lot of people the reason I want on packet time just a lot of people end up in a situation where they say I have a steel and they have they have an audience but they fail to convert what is it about what you did do you think that made those deals work well actually in the world of finance nobody converts except us and it was weird because we built this goodwill relationship with our customers I mean we basically were the only firm where the CEO of the firm and the president whoever was running the firm everybody was out there talking to customers we are our entire management team spent years and years on the road and we introduced ourselves to every customer we built a relationship with hundreds of thousands of people I mean for people that a lot of people think it can't be done and there's very few you know I like talking about the CEOs in the world of finance if you think about you know these multi tens hundreds of billions of dollars of market cap out there and most of these CEOs have never used their front-end technology have never made a trade don't even understand the products but they're in there kind of as a manager that wasn't us we use the products we trade and we understand our technology and we also spend a lot of time with our customers I mean we looked at the value of a two thousand dollar customer the same as a 2 million dollar customer we've had that rule all along so it didn't for us it was just like hey I can't believe this person even wants to listen to our story so we're happening if we look at your story a lot of people would use the catch phrase today content mark it's a hot thing now you're obviously do a fantastic job at it but how I guess one how did you recognize that as something you thought would be differentiating to talk about how you think and then second how did that develop and grow into a real capability that worked a little bit that story so so our mission once we started building thinkorswim we knew our mission was to change technology in order to change finance and make it simple but along the way we realized you know what we're still we built this really cool front-end but people still don't really understand how to use the product in the strategies so after we sold thinkorswim I wanted to do something else which was build a media company and and just like we knew nothing about technology in 1999 we knew nothing about media nothing at all and so we decided that we're going to try it again we're going to build a media company from scratch and we rented a hip-hop studio over on Huron that because they were going out of business and we decided okay we're going to see we're going to see if we can build something really cool an original game plan was to hire a bunch of comedians from second city and improv Olympics and we loved it and we we interviewed 40 kids and I'll say it just if you pre tell story again okay so we bring 40 kids and they're all improv they've all taking improv classes and they all know each other we didn't know they all knew each other they're like traders but there's a little world of improv comedians so 40 of them show up at our at our new studios and we go through each person and we say tell us you know give us your stick tell us your best story make a joke do whatever you want what do you know about finance and obviously nobody knew anything and they were all brilliantly talented but but didn't know anything about what we were going to do so we narrowed the group of 40 down to 20 and we call them all back into the office and we pulled a little bit of kind of what Davos does we called 20 kids back in and we as they walked in the office in a little studio we had we gave each a check for 2,500 bucks so we wrote $50,000 in checks total we gave them the checks and we said if anybody wants to lead keep the twenty five hundred bucks so I want to make sure we're picking the right and then the other one everybody that wants to stay we said okay now that you want to stay you have an opportunity to work for us come back in two weeks give us your best thing on tape give us your best routine give us your best story we gave them titles to work on give us your best improv and we'll hire the top six people and no matter what you can keep the twenty five hundred bucks each now they're all starving artists and so we were like and they were all like this is the great thing like they thought their you know initially they thought we were kidnapping I'm they don't know what was going on I mean they thought you know this is a crazy what's going on so we picked six one is still with us today six years later one woman is Veneto still with us today but the other the other five left to go on to do second sit I mean to do Saturday Night Live to do all these sitcoms but here's the problem we pick six we put them on the air to do this financial content we had this idea like they're going to tell jokes and they're going to have all this crazy banter going back and forth and every time they mention some company we're going to talk about a strategy an investment strategy for that company and people will eat it up they were so boring and so bad and so uninteresting that after watching them for about a month we're like oh my god this is going to be the biggest failure of all time nobody's gonna watch this network so we took the whole thing over we changed gears and we built the largest digital financial company over the last six years in the world and now that company does content marketing for a brokerage firm which is called tasty works and we built what have you seen Tom show that's pretty good see yeah so I have to say those of you haven't Christi's right the set does have a little Howard Stern banter to it but much more definitely but it's fun but you do a great job and it's and you keep the energy up which in that sort of thing keeping it interesting and going is a lost art you try talking about finance for eight hours a night it'll feel like there is a lot of banter and there's a lot of personalities we we did it all with traders and we created we helped to create personalities from all those people and can you bring entrepreneurs in I've seen a few we do we do a segment called bootstrapping Christie does that now we've done almost 1700 bootstrapping episode since we started but the neat thing about tastytrade and the coolest thing is we decided we're never dumbing down like if you if you if you watch our network we're challenging you every 15 minutes and we're giving you a take away every 15 minutes we don't do news and we don't do interviews so we do eight hours a day of think-tank research-based content which is completely unique to find it because there's like CNBC which is all interviews and and business news and there's loom burger which is all interviews and businesses we don't do any of it it's a hundred percent strategic and people are like that'll never work nobody's going to watch this nobody's you know and we're like this is what again this is what why do we have no commercials so we're all content marketing we've been profitable since almost since day one and we've built a really interesting business we raise money again with the same firm that told us we were the worst firm ever this time they came back in with another 25 million and so you have to explain something must have improved in the relationships subsequently you know you grow on people you know you grow on people we they the private equity firms in America are very smart about one thing if somebody is does a good job for you they come right back at you so one of the things that that's encouraging and I say this to everybody here that that's running a startup or that's you know that has that entrepreneurial spirit as soon as you do something as soon as you create some kind of goodwill whether that goodwill is you give somebody content or where that goodwill is you make somebody money whatever whatever qualifies as goodwill the person that person or persons or firm are very likely to come back and support you whether that person is a consumer or an investor or a business partner whatever it is any kind of goodwill that's created I mean we built a business based on goodwill and when you think about that how many businesses have you ever seen based on goodwill and everybody told us it won't work it's not possible we're like we don't we don't care what anybody else says so so you build a whole business on goodwill that's pretty cool is it's a great advice to um I want to go back because you took a tastytrade I'm sorry you took thinkorswim public in a very unusual way yeah I just want to tell a little bit share that story we merged with another company that was a public company and so we effectively we it was kind of a weird they wanted to buy us but we ended up owning them and so how did that unfold the like Wow is that something exciting they want to do well here's the problem so when we first built thinker some we're market makers and when I say market makers that means you know what kind of traders but we we've always been the business of making markets so if you want to buy this iced tea and I think it's worth a dollar I'll offer it to you for $2 if you say you pay $2 I'll sell to you I have no choice because I offered it to you so you know so if I think this bottle of water is worth 50 cents and you want to pay $1 for it I mean even though I'm thirsty I'll still sell to you because that's just how our minds work so we thought our company was worth about two hundred million dollars and we're you know we had built a really nice business and we loved our business we didn't want to sell it and somebody walked in the door and said how much do you want for this business and we said you know we're not for sale because we weren't for sale and then they said well we'll give you 375 million now when you think your company's worth 200 and they give you 375 million you're like all right sure I mean I don't know what else you're supposed to do you know that's just the way you know I mean remember this is like you don't want to pull like what Yahoo did to Microsoft right when when at the time you know Microsoft offered him $32 next thing you know it's trade they're training for 15 I mean you know think of somebody's gonna pay you a hundred percent premium or whatever it is you know so then I turned to my partner Scott at the time I say hey Scott I think I just sold the company and he's like what and I'm like yeah I made a marketing the guy took our offer and he's like they have any money I'm like I don't know we'll see and and they did they're a public company and so then we ended up actually buying them out ultimately and putting them out of business and then just keeping the public company and so ultimately we were public company during the meltdown of 2008 2009 and tell that story because I think both the timing of the sale wasn't where you would like to have sold it but also there's an interesting sort of coincidental story with this yeah really cool story so so thing Kristin became a public company under the symbol swing we were billion to our company for a short pier time a couple months but most time we were hovering around three-quarters of a billion dollars and and then all of a sudden in the middle of the meltdown three companies at the same time tried to buy us and we're public and they all tried to buy us but they didn't want to do it as hostile so they sat down with us and our board was like freaking out because they were you have to take one of these deals and I'm like we don't want to take those heels so we voted against all the deals but eventually the board was like we have too much risk putting it's you steel so we're going to you know because board separates like you got to take one of these deals so they're like we want you to take the TV mer trade deal because they have the most money the other two companies were a little bit smaller so TD Ameritrade said we want to buy it we're like well we don't want your money we want your stock because the market was melting down and we thought the market was way over sold in the end of 2008-2009 and we didn't want their money because money that money made the dealer Creed up to them but money didn't mean anything to us because really things you get you get hit the low low value that's right rate low so we wanted their stock which was all the way down to like 11 or 12 dollars they didn't have any stock left to give us but at the same time the Ricketts wanted Ricketts who owned they started TD Ameritrade they wanted to buy the Cubs so we did a three-way deal as crazy as this goes down the Ricketts needed three hundred and fifty million dollars to buck cash to finish out their cub deal we needed 350 million dollars worth of stock so TD bought the stock from the Ricketts gave the stock to us and effectively the Ricketts bought the Cubs they bought us and that was the whole three-way deal it's like a three-way trade was it was interesting where he's had a lot of everybody we still don't want to yeah you know what we hated the idea of selling the company we were we voted against it still but we were it really bothered us because that was our sweat equity and we we didn't want to sell we loved that company and as soon as we sold it were like well we have to do something else and we started tasting trade and now tastytrade is tasty trade and tasty works because we're really one company it's it's the favorite thing it's my most favorite thing I've ever done this has been the crazy rewarding experience so sometimes you make a deal and you don't like bill but you're like I got to live with this and it's cool I mean if this has been this company has just been incredible and we get a chance to talk every day to a hundred thousand viewers approximate a hundred thousand viewers a day we get a chance to on air we get a chance to make fun of each other we get a chance to trade all day long we built the best new technology in the industry and we're having a lot of fun and and what an ounce sixty and we're starting our next company we have an one left idea in 2018 and I'll be 61 that's cool I like it let's take some audience questions here if you didn't if you didn't need the money why did you go out looking for the money in wasting time on due diligence in the first place I read these verbatim okay so there's no such thing as you you don't need of course if you have a profitable company and you have money in the bank you don't need money but when money is cheap and you can get money because people want to invest in you you have to take it you absolutely have to take it when money when you need money it's ridiculously expensive and everybody has their claws into you when you don't need money and people want to give it to you and you can do it on your terms it's a simple trade everybody should do it most entrepreneurs are so scared of dilution and control things like that it doesn't faze us at all we will always take the money and and dilute and just build up and stockpile money because when other people need money you can make good deals one of the other questions was you talked about building the company on a vision rather than a market needs and the question was I see you were right but how would one know if they were wrong and how would some of course correct or think about trying to navigate that because as you said that every trade works out so so we've we've interviewed almost 1,700 companies since we started our bootstrapping segment you know six years ago a little over six years almost seven years now and I would say the 79 companies there's a handful of billion-dollar companies have been created and there's about 1,500 that are no longer around and so so we've got to experience firsthand you know a lot of the failures and what doesn't work for people and you know some of it I think is their ability to articulate whatever their vision is other people it's just not a great idea other people they run of capital whatever it is but what you can never the biggest mistake you can make is not pursuing whatever your vision is like I'll tell you what I tell our attorneys all the time I'm not interested in your advice not interested your business advice I'll listen to your legal advice but don't ever tell me how to run my business and I think it's the same thing when it comes to you know people that are starting a business it's your vision it's your idea go for it I tell my kids I tell every single person that ever asked me should I do this if the question is should I do this my answer is always yes now that assumes certain things that assumes like reasonable pot odds that assumes you know it's not a crazy shot but for all that the answer is always go for it always never say let me think about it and never say no so question is takes taking three years to get to market you know building technology would be hard to do today in terms of the script the question is the kiss of death to be that long needing that much funding the question was what would you do differently if you had to start up today well we faced that challenge today yeah you know that's a what would we do differently and and I don't know you know because if people's people actually ask that question a lot they say if you could do it all over again what would you do different or if you could you know do something like I don't know because we're constantly thinking that we're building the next our next company and I don't even know what that's going to look like so I don't know what I would do different I think again one of the biggest takeaways from this event tonight is just understand the importance of quick decision making and your ability to practice quick decision making one of the things I love about trading and the financial markets and Chicago is kind of the home of this hub is that you have an opportunity for a very small amount of money to participate in a listed marketplace where you can take emotional risk and monetary risk 10,000 times a year if you want to that changes your ability to to process logic and engage in a decision-making mechanic a series of misusing making mechanics that will change the way you think about entrepreneurship successful entrepreneurs make quick decisions and they make good decisions over time because they understand kind of the probabilities of statistics and the logic and if you can make a bunch of trades you can kind of change your mind it's a in the in academia they call it economic bias but in training we just call it quick decision making and your ability to say no to certain things and your abilities say yes and I can't stress that enough create advice people in the FinTech world that have an interest in knowing your opinion on bitcoin cerium that sort of world the blockchain so we're like everybody else we're absolutely fascinated by you know I mean I own some bitcoins although I've lost my wallet I interviewed yeah now so I'm stupid I it's somewhere we'll find it eventually I interviewed the the founder of etherium before when he was like 18 I think I was the first interview I was the first person that he ever did an interview with from from his basement from his mom's basement in Canada somewhere and he was like he's like he tells us before we went on air he says you know these things are only like I think there were three to five cents of the time he's like you should be buying these what yeah sure kid you know it's like one of the guys that works with us is his name is Dylan Ratigan he used to be he works for tastytrade now and he used to be on MSNBC and and and and CNBC and he was the host and and Dylan did an interview once with Mark Zuckerberg he did his first interview and he goes he didn't want to do the interview because he didn't think Mark Zuckerberg was anybody would ever amount to anything he's like I'm not interviewing some college kid and so I feel the same way with interviewing the the guy that started theorem but um were fascinated by it unfortunately and we're in a business that can they would love to use ledger technology we would love to use we would love to be able to transfer funds so much you know it's so much more efficient it's so much and yet the industry hasn't caught up so we don't focus on things like if we could trade Bitcoin if we could trade it in a liquid market in an efficient market and it had more scale the problem with Bitcoin is we trade more in five minutes in our platform in notional liquidity than Bitcoin trades in a year so so it's really difficult to trade it because the markets are just too thin and too small and then when you get to aetherium you're talking about you know a fraction of Bitcoin size so will Bitcoin in our lifetime in our kids lifetime be huge I think so will crypto currencies not necessarily dominate but they will have they're a very important place in moving money I don't think in consumer transactions but I think in moving money and I think as tradable investable assets absolutely okay so you've been a great entrepreneur you've done this a few times had a lot of success talked about Chicago being kind of derivatives capital Christy did the you know making markets what do you think about Chicago for FinTech and is FinTech really the right term or should we unpack it break it down further to really think about companies I don't really know what FinTech means but Chicago is I mean I understand the general concept but I don't really get you know there's a lot of firms that they call themselves FinTech firms the hardest thing about Chicago is I kind of feel like if first of all I love Chicago and I've been here 36 years this is where I live and I live in the city and I'm never moving that stuff but I kind of feel like if we were anywhere else in America we'd have a lot easier time hiring developers in Chicago there is incredible competition because of the high frequency firms and all the prop firms and all the really successful financial companies like Chicago is the hub of prop trading firms which means proprietary trading firms which means they trade their own money and most of liquidity providers are in Chicago most of the firm's that have the best high speed technology are in Chicago and they pay a ridiculous amount of money I told Don Wilson once who's one who got one of the greater crop firms TRW he said I said Don you hired some of our guys away he offered twice as much he said Pat after them five to 10 times as much yeah he said it and by the way it's a great I'd make it every time it's what they what they can develop for us is worth it but for startups they break the market it's exactly the problem so I'll give you an example my I have a nephew that just graduated and just graduated from Wash U and he just got a job in Chicago so he said can I stay with you for a couple of days until I until my apartments ready to go sure so he got a job with a high-frequency trading firm and I go why don't you talk to me I didn't even know you were a Java developer my own nephew and he's like he's like you can't afford me I saw what you guys paid you can't afford me go on my own nephew I almost threw him out last night that's great so two questions we always ask at the end just retrospectively you know this is more like lessons learned you've already probably internalized so it's not but are there things that you learned along the way in those million trades and those hundreds of ads that weren't the right trades that is there a pattern that emerges a boy you know this type of thing I'd never do again I really learned that I want to steer clear of something like that what would it been could have been from the early days of course yeah well what I've learned from talking to my cardiologist is I will never eat fried food again okay that's the single most important thing that's affected my life other than that you know it's kind of I don't know how to answer the question of things that we that we wouldn't do but I would say that they have the other happen is what would you always do again is there some lesson I would always we always choose I mean Christy and I we we talk about this every day we we argue about it and then we ultimately come to the same decision every time we have an opportunity to take risk we take it same with same Wisconsin with everybody else that's part of our management team every time we have an opportunity to take risk we take it and we do that like there's no standing still for us and we're not trying to make like we're not trying to be the next why is that been the right decision I mean if people who might hear you and say please a risk-taker but obviously it's a smart bet it's been a good trade for you sure a rule of thumb trading so why do you think that's a general like a why do you think that's worked so well and what would be to take away for folks listening well I think if you look at the firm's when you when you sit around any talks of successful entrepreneurs and you have an opportunity over time to you know and I'm sure you've had a ton of them on this on these discussions but when you listen to you know the decisions of kind of like you know the Brad Kewell's of the world and the Elan musk of the world the real the real outliers the one one-millionth of 1% the outliers that turn you know that create multiple billion-dollar companies and you look at the way they just operate the way their minds work it seems like they take a ridiculous amount of risk in their decision-making but the reality is all of it is incredibly calculated and when they make when they have an opportunity to make a decision they go for it and that's something that you just you can't you just don't see that with people like when we first started our network recent set of people if you can order a pizza if you can order a pizza you can trade and we kind of wanted to take that to like 18 different levels you know two different degrees of that but essentially say to people you know if you can make a decision and a fast decision and you're and you believe in your decision you will be successful believe it or not there's there's so many great ideas there's so many entrepreneurs in Chicago there's so many people here at 1871 that have incredible ideas but for a lot of people it's it's not like we don't have the smarts not that they don't have the money it's just that at some point the decision making becomes overwhelming and the risk becomes overwhelming and if you're not comfortable taking emotional and monetary risk is really hard to do well it's been a great story and the story behind the story is incredible thanks so much for sharing about thank you [Applause]
