Bloomberg cashed out $10 million when fired, then sold a machine nobody had built.
The money was his stake in the only full-time job he had ever had.
In 1981 Michael Bloomberg was 39, a general partner at Salomon Brothers. He had headed the firm's systems development, back when prices still came by telephone and paper. One summer morning the managing partner John Gutfreund told him, "Time for you to leave." Salomon had just been sold, and the new management fired him.
No firm offered him another job. He started Innovative Market Systems, bought people coffee to get a meeting, and promised Merrill Lynch that its traders would see what their holdings were worth, instantly. He later wrote, "No one else had done any of these things—and neither had we—yet."
Merrill did not just buy a promise. Its $30 million bought a 30 percent stake and five years of exclusivity. In 1982, in a global recession, the first 22 terminals went into Merrill. Today a Bloomberg terminal costs upwards of $32,000 a year, according to IEEE Spectrum, the engineers' magazine. This March he was worth $109.4 billion.
If your company pays for a supplier's unbuilt product, what rights do you get in return?
AI-generated illustration with narration by an AI voice.
What the captions say
- This is the story of how Michael Bloomberg took $10 million and sold a machine that did not exist.
- That machine is the Bloomberg Terminal, which rents for over $32,000 a year.
- At 39 he was a general partner at Salomon Brothers, in his words the hottest firm on Wall Street.
- Prices reached a trader by telephone call and printed sheets, and he was the man who ran the systems.
- Then one summer morning the managing partner John Gutfreund said, "Time for you to leave."
- Salomon had just been sold, and the new management fired him, paying $10 million for his equity.
- No firm offered him another job. He wrote that he was essentially hearing, "Here's $10 million; you're history."
- So he started a company of his own, Innovative Market Systems, to build that machine.
- To get meetings he walked in with a coffee and asked to bend an ear.
- Then he promised the brokerage Merrill Lynch that its traders would see what their positions were worth, instantly.
- In his own words: "No one else had done any of these things—and neither had we—yet."
- Merrill put in $30 million, and in a global recession Innovative Market Systems delivered its first 22 terminals in 1982.
- By March this year his own fortune was $109.4 billion.
- He wrote later, "I started my own company, based on an idea nearly everyone thought would fail."
