The advice that birthed SecondMarket
A few weeks ago, Barry Silbert from SecondMarket gave a talk to InSITE, the graduate student entrepreneurial fellowship. He told countless stories and relayed some great pieces of advice that he has been given over the years. One in particular stood out because it allowed Barry to create a company that was profitable in month one. When Barry was first starting out in 2004, he wanted SecondMarket (or Restricted Stock Partners as it was known then) to be a fully automated online marketplace for illiquid securities, like restricted stock in small cap companies. His initial fundraising target numbered in the millions, which is quite a lot of money to bet on a revolutionary idea like the one he had. One prospective investor, intrigued by the idea of injecting liquidity into these securities but turned off by the size of the ask, told him to forget about building the web platform and to just make transactions happen. The web platform could come later. Essentially, he was telling Barry to prove that there was a desire for the product by doing by hand what it would do automatically. So he opened up Excel, researched potential buyers and sellers of illiquid securities, made a lot of phone calls and started brokering transactions. And the money started rolling in – to a company without any big expenses or technology investments to pay off, no less. A profitable company was born and an entirely new way to trade previously untrade-able securities was unleashed on the world. Boom. Game changed. All entrepreneurial stories are inspiring but to a non-coding business student like me, this one in particular moves me.
