On the morning after Halloween, entrepreneurs gathered for KC Roundtable at First Watch in Westport. Many were still sleepy-eyed from taking their children trick-or-treating the night before — and calming down midnight sugar highs from the kids’ consumptions of too many Reese’s Pieces.
Regardless, all ears were fastened to hear speak about BATS Global Markets : a modern day story of David versus Goliah; an infant stock exchange from the Midwest versus the pre-existing, indestructible industry giants, NASDAQ and the New York Stock Exchange.
Breaking the duopoly
BATS was founded in 2006 to stick a wedge in the system and force NASDAQ and NYSE to loosen their strict control of the market. But the only way for BATS to possibly compete with the manpower and credibility of the duopoly was to use its small size to its advantage.
Focused on running extremely efficiently, BATS was able to charge just $0.01 per 100 shares, compared to the $0.10 per 100 shares charged by its competitors. And after a little help from key investors, including Lehman Brothers (pre-collapse, of course), plus some savvy guerilla marketing, BATS achieved its goal. Both NASDAQ and NYSE have come down in price to $0.03 per 100 shares, and BATS now handles 13 percent of the U.S. market.
“ Service wins”
BATS maintains the efficiency needed to compete by placing heavy emphasis on extremely informed, well-rounded, and rigorously-vetted employees. As Isaacson points out, “service wins;” every BATS customer who calls the Trade Desk has his question answered by the first person to pick up the phone. As you might imagine, in order for this theory to hold water, every BATS employee must understand as much about the market and technology as the next.
Those hopeful to work for BATS should expect a Google-like hiring process. After an exhausting eight to ten interviews, those that remain standing can hope for a spot with BATS . And once they’re accepted, they are extensively trained at BATS University.
Fixing Higher Education
Unsurprisingly, the talent BATS seeks (and gets) is the best of the best, the cream of the crop. They want employees who take initiative, who are problem solvers, and who think outside of the box. Unfortunately, Isaacson has observed that even the most talented college students are graduating with these job skills. Therefore, Isaacson serves on the board at the , where he obtained his MBA , in effort to bridge this gap and instill creativity and confidence into students.
For an entrepreneur who persists that he’s “nothin’ special,” he’s certainly got our attention.