Entrepreneurial Case Study From My Wall Street Days

There could be no logical basis for thinking I would be successful on Wall Street. I had no financial experience whatsoever, and was hired by E.F. Hutton because of my IBM experience where I analyzed IBM’s competition. I was lucky that soon after I was hired, IBM announced its Copier 1, and people wondered whether this might impact Xerox, one of the “nifty fifty”, the name for those 50 firms which were “buy and hold”, they were so strong.

The Japanese were not that strong yet in copiers, and Wall Street just yawned. I thought there might be an opportunity here, and I spent weeks talking to as many industry friends as I could, evaluating all the parameters where Xerox might be attacked successfully (and unsuccessfully).

sunflowerUpon concluding my research, I wrote the very first negative report on Xerox, and it became such a hit with the Hutton management and its sales force, that each salesperson arranged for us to visit virtually every important bank, insurance company, foundation, investment fund, in other words, all important institutional investor organizations. What chutzpah of me to bash Xerox! Perhaps prematurely, I rapidly became well known on the street in the technology area, and by the end of the very next quarter I received a Hutton envelope with my first quarterly bonus of $25,000, 100% of my then-annual salary!

A year later one of the big-three in Wall Street research, Oppenheimer, pursued and hired me. This was now really big time, and I had to ask myself again: how could I make a mark in competing against the awesome concentration of MBA brainpower across Wall Street?  I had to figure out some way of truly being different! Not just along the trivial lines of writing a gangbusters report as I did with Xerox, but to be recognized as differentiating myself out in some fundamental way, or ways!

Some of my procedural innovations:

Analysts were spread so thin in their coverage of 20 or more IT firms that they missed the explicit or subtle effects IBM was having on the others. Thus I specialized on this company which I already understood from the inside. (Of course, I also covered others). Being “the” IBM expert elevated me to a position where investors were interested in speaking with me and in reading my work, almost regardless of what IT company or sector they were agonizing over, most of which were seen as vulnerable.

When visiting with clients, other analysts would invariably simply chat across the clients’ desk, hardly ever using props. I chose to almost always present my pitch via a presentation 3-ring binder, propped on the desk while I leafed through my hand-drawn arguments. This style, which seems trivial, definitely helped differentiate me.

Every morning while driving to work I’d  dictate a brief and hopefully original message to the full  Oppenheimer sales organization, an idea which I felt should be disseminated to our broad client base. These messages became raw material and an excuse for our salespeople to call their clients directly, with “Gideon says….”. The salespeople ate it up, and one salesperson coined these messages “Sunflowers”, because  “parrots ate sunflowers”, and the sales people were there to “parrot” my research. Sunflowers virtually became an institution.

And so forth. I believe this is a valid case study on entrepreneurism.


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