In His Own Words: Q&A with Bloomberg Cofounder Thomas Secunda

Editor's Note: During a tour of the Bloomberg LP Museum at the company's headquarters in Manhattan, one can see how the Bloomberg terminal evolved from a small customized keyboard and monitor to the product that most traders know today. In fact, looking back at the first Terminal's colorful keyboard that only had a handful of keys, you wonder how something so simple (by today's standards) really changed the industry. However, Bloomberg's Terminal was a drastic shift for the industry and it was the launching point for what has become a multibillion-dollar financial services data market. Secunda reflects on Bloomberg's beginnings and how it evolved from essentially a hardware company to the service provider it is today.

Secunda: When I started working, people still used hand calculators to figure out yields and spreads. When you wanted a chart of two bonds, you called up your fixed income research department and they'd print it for you. Then you would have a messenger deliver it to your customer. Quick ways to do these functions didn't exist. When Bloomberg started in 1982, the technology that people had was big IBM mainframes with 3270 terminals that were very big. There were some mini-computers out there. But even though there was an IBM PC, it was hardly distributed in the financial community. PC stands for personal computer. It doesn't stand for network device. Nobody in the financial community was networking their PCs at this time. We had to build our own local devices and run composite cable out to the desktop and we built a little keyboard. What was challenging back then was the only people who used keyboards were secretaries and they used IBM Selectrics. Financial professionals didn't use word processors; instead, there were keypunchers who punched your ticket. They didn't have keyboards on their desktop and if they did, it was a teeny one that they only used to type in a stock ticker. Nobody was really typing. Our first system was for Merrill Lynch.They used to write a paper ticket, rip it into the five, and put it on the belt. One would go to the keypunch person, one would go to the risk manager, one would circle around and go to the trading assistant, who would take it off and mark it against the blotter that he had on the desk. And they would see if the ticket came in, because sometimes the belt would freeze, and you'd fail on the trade.

When Merrill asked us to look at that system, they figured we were going to come up with another belt, but we didn't. We came up with a system where the salesperson put it in, the trader put in the skeletal trade, and you matched them. It was no more than picking a security and entering size and price, because you can match that. Our biggest hurdle was getting them to type. We made small keyboards. Our original keyboard was a square. We did everything we could do to make them not think that we were trying to make them into secretaries.

Uncharted Territory When we started in business collecting fundamental data on equities it wasn't easy. There was no digital means of delivering it. You literally had to get a fax from the company, and the motivation for these companies to send out faxes was not great, as it cost them time and money to do it. The people that would get the faxes would be the equity analysts that had relationships with the companies. We made relationships with clerical people so that we were early in the queue. We would get these faxes and we would scan them. Next you would read it on this screen, and you'd type in the values. That was incredibly powerful because everybody had to do that. We thought we could save the Street a phenomenal amount of money by doing it for them. And if we did it, companies didn't didn't have to do it anymore. If a firm had 10 or 20 Bloombergs, it was significantly cheaper than the cost of them going and creating this new data. We sold it, people loved it and it was really important because we had more historical data. We came up with a way of normalizing the data because different industries are legally and ethically required to report their numbers differently. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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