Today I had the opportunity to hear entrepreneur Jeff Sprecher talk for 45 minutes at the Atlanta Rotary club. Just six weeks ago, his Atlanta-based company InterContinental Exchange (NYSE:ICE), bought the New York Stock Exchange for $10.9 billion dollars. That’s right, NYSE, started in 1792, and viewed as the heart of American capitalism for over 200 years, is now owned by an Atlanta upstart that was founded in 2000.
In his talk, Jeff recounted trying to get into the software business in the mid 1990s. After becoming a successful entrepreneur building power plants in California, he saw the state’s deregulation of the electricity market as an opportunity to build a trading platform. Only, the state wanted it to be a government run marketplace. After licensing software from a startup in Sweden, Jeff bought a DEC VAC minicomputer, rented a U-Haul and a generator, and drove from Los Angeles to Sacramento. He camped out on the front lawn of the capitol building and paid a lobbyist to bring legislators out to see the product in action, inside a U-Haul. Only, other, more powerful lobbyists, got a bill passed outlawing any private electricity marketplaces in the state.
Undeterred, Jeff found a startup in Atlanta building a trading platform that was owned by a power company in Iowa. He promptly offered to buy the company for $1 plus the assumption of $4 million of debt and quickly consummated a deal. Immediately everyone except for the engineering team and a few sales people were let go and the company was rebooted as a derivatives trading platform. After a slow start to the business one of the best things he could have hoped for happened in December 2001: Enron collapsed. Enron was the dominant company in derivatives and energy trading. With a giant hole in the market, ICE quickly stepped in and became the market leader.
Over the years ICE has acquired 17 exchanges all around the world and now has a market capitalization of nearly $25 billion dollars.
Jeff Sprecher is Atlanta’s greatest active entrepreneur.
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