Don't fear established players. Entrepreneur Barry Silbert talks about how he started a marketplace for non-public alternative investments.
00:07 Barry Silbert: Barry Silbert. I'm the founder and CEO of SecondMarket. So, SecondMarket is a marketplace for alternative investments. And so we're creating a platform to bring together buyers and sellers of essentially any type of investment that does not fit on an exchange, like stocks or bonds or options. There's tens of trillions of dollars of these types of investments out there and over the past 6 years, we've created markets in a number of different types of investments. Private company stocks certainly being the most well-known.
How did the idea for SecondMarket come about?
00:40 Silbert: I was an investment banker for about 5 ½ years, working on distressed type of situations like bankruptcies, things like that, and I was a bored investment banker. I'd been doing it for a while and the idea for to create this marketplace really kind of came out of a lot of the deals I was working on where I kept on seeing situations where there was a liquid assets being held by customers or clients that we had who needed liquidity. It was shocking to me that there was no one place where you could go to, an eBay-like marketplace, to sell these assets. And so I decided that I was going to leave investment banking with the big salary and roll the dice. I kind of figured I could always go back and be banker again and fortunately, I never, ever looked back.
Where does SecondMarket fit into the investment world?
01:30 Silbert: SecondMarket is very unique because we have some Wall Street DNA, and then we have technology DNA. If you think about those two different types of cultures, sometimes they can work very well together and sometimes they can clash. And I think what people have come to realize is you need to have the two sides of the organizations have to really understand and respect one another and leverage off of each other. In our early years, we had tried to build technology and I don't think we had done a very good job involving the Wall Street business side of the organization and the technology side. But over the past, I think, 12, 18 months, we've done a really, really good job incorporating the thinking from both sides and came up with a really, really good product.
What is a lesson you've learned as an entrepreneur?
02:17 Silbert: As a first time entrepreneur, especially coming from the investment banking world, where you worked very, very closely with teams, I didn't fully appreciate up until a year ago, how important the kind of the relationship and the interaction is between me and my employees. We have about 150 employees now, and around the time where we got to about 100, there were people that who were hiring who I never met, who I didn't interview. And I think one of the mistakes that I was making early on was that I was assuming that our employees knew me, that they were comfortable coming in and saying hello and comfortable engaging. It really kind of took some feedback from the kind of from the folks and the staff to kind of make me understand that yes, for the first 15, 20, 30 people, we spent a lot of time together, same room, going to meetings together, but that's just not happening anymore. So, what I had to do to change that was interact more, whether it's spending more time... I set up desks in various parts of the office, having town hall meetings where I update the company on what's going on, have a kind of Q & A session. And it was just trying to make myself more accessible.
What advice do you have for other entrepreneurs?
03:38 Silbert: I would say, number one, the most important decision you're going to make is to go start doing it. Don't over think it. Don't over engineer it. Don't over analyze. Just leave whatever you're doing and go for it, number one. Number two, I'm a believer in not fearing the big large established companies. We approach Wall Street looking at some very, very well-capitalized companies and early on, I thought they would be competitors. I thought that they would be... I don't know if they're customers, whatever it may be and ultimately, what I realized is, they're just so slow to innovate. They're just slow moving that you can run circles around them. And the other piece of advice I'd like to point out is that I think our generation... I think we're the luckiest generation in history because we have the tools and the ability to change the world, and I think that's really exciting. We really got it going.