I want to be careful in my wording this time, since this is an interesting topic that has come up many times in several forums over the last few years. I want to be perfectly clear that competion is fine, and we were the "new guys" only a short decade ago. We did have around 14 years experience on various trading floors, started a professional service brokerage on a Regional Exchange, and had some pretty good overall business backgrounds (I "started out life" in Public Accounting, and have been involved in many startups in and out of this field). The same goes for my brother, who spent many years in higher management with a Fortune 500 company.
One of the distinctions that we are pretty proud of is that we never had to go outside the family for financing. This is a gigantic mistake for the investors (obviously), and even for the people trying to use "OPM" to start a business. When you have all your own money on the line, you learn how to run all aspects of the busines. We don't waste money on advisors, accountants, lawyers, and all the rest (we do, of course, seek professional help whenever necessary).
Another benefit is that we had an expert in the computer and telecom field as a full partner in the Firm (Edward Franco, COO is a trader, computer and network expert, business and social "networking" asset due to the fact he knows nearly everyone worth knowing in the business (and if he doesn't he soon will).
I have done a lot of marketing through "attraction" vs. "promotion" in the past, with the help of some very good friends in the field whom I could call upon for help in "getting the word out." I realized early on that I can only "market" something I feel very strongly about, and realize that business only works if it is fair to all concerned.
We have tried to "grow the industry" by bringing in new traders (as opposed to merely "reshuffling" the existing people by trying to grab other people's traders) through education. We have found that by teaching College courses, offering Internship programs at various major Universities, and the like has helped us grow. This type of thing takes a lot of time, and you simply cannot hire "recruiters" to drag in people with stories about making money when these "recruiters" don't even trade themselves. During our training week each month, my day consists of trading and monitoring risk and anwering phone calls and emails until 1PM, then teaching the course from 2PM -6PM, and then teaching at the College from 6:30P -9:30P (don't start playing the "poor Don" violin yet, wait for my point here)...which simply means that we care so much about the business, and that we truly love what we do, that it doesn't seem like work to us. And since we have enjoyed some success, and even have some respect from our peers, it makes it seem worthwhile.
Another primary factor (to think about) is that we have a strong loyalty from our Clearing Firms (we have been with SLK since 1978), and have effectively taken them out of the "risk" portion of the business. They only have one entity to look at, we monitor all of our own risk, and again, have our own capital at risk, not just the traders money, as so many (past and present) have.
Gene seems to have a good solid business model and is certainly knowledgeable and business-like in his approach. Regarding Jeff D. and others, I will bet that if you asked them they would tell you that it took considerable time, and a lot of effort to get going (in this climate especially). Many of the "established" firms have closed or are cutting back tremendously (I have even heard from the grapevine that an extremely large prop firm has cut their traders buying power by 75%, and have not allowed trading between 11A-2P...?? sounds a bit drastic, and is probably exaggerated), and others are closing their various LLC arrangements and offices, at least according to traders who have been calling here. So if these experienced firms, with capital, are having a rough time...well, you get my drift.
We are fortunate that we have continued to grow at a 40% rate every year, and have done so because we have a good "team" of traders who help one another, and we have tried to keep the "cut-throat" competition to a minimum. We are very competitive by nature, but do our best to keep it within the limits of propriety.
Sorry for the long dissertation, and I hope that whoever decides to help grow the industry with us is as serious about it as we are. Remember, making money is easy, but making money doing what you love to do is much more important. Take the above for whatever you think it's worth, and try to lead by example.
