Self-Made Billionaire: Warren Buffett’s $1,000 Company Turnaround
A small investment at the right time can turn ordinary people into millionaires. For Jeffrey Sprecher, founder and CEO of Intercontinental Exchange, it took a $1,000 investment and an unconventional idea to set his business on a path to becoming a $98 billion company.
“I had this idea that you should be able to trade electric power, buy and sell it on an exchange,” Sprecher recalled at the Rotary Club Of atlanta.He admitted he “had no idea how to do that. I’d never worked on Wall Street,I never traded.”
Sprecher learned that Continental Power Exchange-owned by Warren Buffett’s MidAmerican Energy-was nearing bankruptcy, despite a $35 million investment from Buffett’s company. He saw an opportunity to pursue his vision.
“I bought the company for a dollar a share, and there were a thousand shares. So I bought it for $1,000, and I used that as the basis to build Intercontinental Exchange.”
Sprecher’s net worth is now $1.3 billion. But the early days weren’t easy.
Living frugally while building the business
That $1,000 investment in 1997 launched Intercontinental Exchange, officially founded in 2000. A team of nine employees began building the technology in Atlanta, Georgia, determined to revive the struggling company.
Everyone pitched in, and Sprecher wasn’t exempt from the grunt work. He lived in a small apartment and drove a used car to conserve funds.
“I bought a 500-foot, one room studio apartment in Midtown…I bought a used car that I kept and I’d go into the office from time to time,” Sprecher explained, adding that he “took the trash out, shut the lights out, answered the phone, bought the staplers and the paper for the photocopier. That was the way things worked.”