Mike Bloomberg was in a fortunate but uncertain situation. He had $10 million but didn’t have a job. He figured he had three options: look for a job, remain unemployed, or start a company. No one was calling and offering him a job, and he was too young to retire. He decided to start his own company.

According to the biography I’m reading, Mike asked himself what he had the resources, ability, interest, and contacts to do. In the 1960s, Wall Street was drowning in paperwork. In the late ’60s, Mike read that computers were good at storing data. He convinced the Salomon leaders to let him work on a project, nights and weekends, to automate data collection and retrieval. In 1972, he and a programmer launched B Page at Salomon. It was an internal system to access historical trading records and available data on public securities. It was also a messaging system for internal communication. When fixed trading commissions ended, Wall Street firms began making money using math-heavy arbitrage and trading strategies. B Page gave Salomon an edge over other firms.

Mike had money and knew smart people at Salomon, so resources weren’t an issue. He’d figured out how to create a data system for Wall Street investors, was interested in data and financial markets, and had contacts all over Wall Street. He started a company offering software that let non-mathematicians analyze bond information. In 1981, he put $300,000 in a business checking account and recruited four coworkers from Salomon.

Mike needed credibility and revenue for his start-up, so he did a six-month consulting project with Merrill Lynch and was paid $100,000. He used that project to get introduced to Merrill’s leader of capital markets. He pitched a nonexistent product to the leader and told him he didn’t have to pay unless it was delivered on time. Merrill Lynch liked the product and agreed to the no-risk deal. Mike hired salespeople and operators, even though the product was still being built and they had only one customer. He blew through $4 million and ultimately hired almost two dozen people. He began to wonder if he was jeopardizing his wealth and reputation.

In July 1983, Mike’s firm, Innovative Market Systems, delivered its Market Master product to Merrill. A computer terminal with a keyboard allowed users to access bond market data and analyze whether a bond was cheap or expensive. The product was delivered on time and worked well enough for Merrill to commit to purchasing. Merrill paid a $600,000 one-time custom development fee and $1,000 monthly for each terminal under a two-year agreement. Merrill initially took delivery of twenty-two terminals, which resulted in $240,000 in subscription revenue over two years, bringing the total deal value to $840,000.

The Merrill deal led to credibility and other clients, such as the Bank of England, signing on—and to a critical acqui-hire. Michael met data entrepreneur John Aubert in Merrill’s cafeteria in 1984. John’s three-person firm was skilled at gathering and structuring data. The day they met, Mike agreed to absorb John’s company. John went on to start Bloomberg’s data-collection facility and devised Bloomberg’s data-collection process, which included a crucial analytical component. Data was the backbone of Mike’s company, and John’s skills laid the foundation for the company’s data edge over competitors.  

Things were starting to click for Mike. The more he thought about his data and analysis business, the more he realized he needed to find different ways to distribute his product.