I really enjoyed it. It is a gripping story and well told. So my first question why did you decide to write this now . Was there something more you wanted to say, what motivated you . It was written to the young entrepreneurs know how hard it can be and how hard rewording it can be so that it offers an encouragement to think if i want to start my own business, i should do it. The other thing i wanted to do that before i got too old to remember because looking at this from when it dictated at the Stock Exchange and then going through all the technology was really an Inflection Point in the Financial Service industry and i wanted to tell the story from the inside so people would see the human aspect to it. Host so, the title the harder the work the luckier you get, is that tongueincheek or did you believe that . Guest sam is the one that put the phrase together but then as i was talking to the people at simon schuster, and of course it isnt about time and time again. It sounded like it should be a good title. Host there was an amazing amount of hard work that you went through. Somebody that has written a lot about the financial industry that worked on wall street for close to 20 years the story that you tow about building ameritrade and how hard it was was truly gripping a. I never got the impression. Of course i didnt live through it. How did you do with . Guest one of the things that made it tough we started with almost nothing and in fact back in the 70s we had to send out a Financial Statement every six months to our customers and one of the customers called me and said i thought i have to tell you that you left 30s office Door Networks and i have to tell him no, those are the figures that you are seeing. So, we could only grow by the capital that we left in the business. We also had to be careful about running a business in the regulations so it was a constant struggle with balancing. How much money can i put in advertising and how much do i need to make sure the increase in the business isnt going to exceed the capital and how much can i put into hiring new employees and binding equipment for them. That is what allowed us to grow. Even being in business after almost 20 years when i saw the opportunity for the internet and for advertising, i said we dont have enough cash, we dont have enough money and we are not going to make it with these generated funds. We will probably have to go public. That is at the time that i regrettably said if we are going to stay in this industry and be one of the winners, we are going to have to have more capital. Host obviously that is a momentous decision in any companys lifespan. You spoke about the momentum big bang when the commission blamed away and what that meant for your business. In my own writing and research in wall street, really one of the most important moments in history is when the firms started going public and when they went from publicprivate partnerships obviously its made access to capital a lot easier, but how do you feel . It sounds like you had some regrets about going public but you had to do it for the Capital Access and the same thing they said about goldman sachs. Was something lost when you went public, and how important do you think that this idea of Companies Going public is to the way that it changed the culture of wall streets . For us, for me it was a very difficult position because it was for my family to offer that after i could retire and was gone and i knew if we went public it was going to be difficult to maintain the atmosphere but at the same time i also knew we needed access to take advantage of the opportunities ahead of us and that turned out to be right. I figured we needed 100 million for the advertising of the figures turned out to be a low so it was the right amount to get us into in lack of a better term the Upper Echelon of people that were going to be able to stay in business. At one time we had over 400 competitors, but most of the people were laid out before the 1990s. Iits very similar story to the Automobile Industry or kind of any i knew if we wanted to stay small we were not going to be and i wouldnt have anything to leave to my children. At the time that we went public and i got all the listings on capital people felt close as i described in the book about working at ameritrade everybody seemed to enjoy it. When you go public you kind of become a different company. For lack of a better term you become more professional. You lose that touch that you feel when you were a private company. I have a different attitude towards the Investment Bankers. I dont think they should have ever gone public. I think that they had better control and management of what they were doing as Investment Bankers when they stay private. So i see dealing with the public as two different businesses that need to be thought of separate separately. We did while. We are getting into so many other businesses so Morgan Stanley had a big brokerage. They were in so many different businesses maybe it was inevitable and Capital Requirements were not that much different than the retail brokers. Did you feel that the underwriters did a good job with that in the process or did that leave something to be desired . I was amazed. We have been in business for 20 years and we couldnt get anybodys interest. Until we got to first boston then they didnt understand the business and they were not enthusiastic they did it because the money but there wasnt any special enthusiasm for the stock and after we had been public for a while and demonstrated to the market the kind of growth we could have come and find me up and they said why dont you tell us and i said i tried to you just wouldnt listen and buy into it. Weve been growing at a phenomenal rate and nobody in the industry thought that we would be anything other than a startup business. That was all a surprise and shock. Is that because you were in oklahoma and not new york or San Francisco . Guest i think even if we were in one of those Money Centers would have been thought of it would have been looked at the same way because the securities industry didnt want to think they were competitors. They also had Warren Buffett. I dont know if the Warren Buffett phenomenon would work. Maybe i would see them once a year or so shes in a completely different world than i am. He didnt speak to the council, Salomon Brothers or anything. That is certainly correct. Host you said in the book how there was a different outlook with your family, your parents, you had different interests. Was that hard for you growing up, did have somebody in the House Building business that your father was in order the couple of things kids growing up were interested in sex guest it was not hard. In fact, i had an ideal growing of period. In nebraska in the 40s and 50s and 60s was an absolutely wonderful place for people to grow up and my best friend. We still get together and look at that and say we really had the most wonderful way and we didnt realize it. Now with respect to my father and then when my grandfather died my father bought the assets from the estate and my father would have liked for me to be in business with him and in fact he encouraged me to go to Engineering School but i had no intention. I tried but you have to have talent with your hands and if you dont have the talent, i dont. You have to understand where you should be all things and that sort and i didnt have that. The second part was i couldnt wait to get out of Nebraska City even though there was a wonderful place to grow up when i became a young man i was ready to go out for new adventures. So, although my father would have enjoyed me coming into business with him, he knew that i was never going to do that and even counseled me. I dont want to disappoint you, and i am pleased that you are not still disappointed. Some of the other aspects about playing sports, no i never did feel any shortcoming i tried to play sports but i was all thumbs. It didnt work. I try to catch the ball and it would hit me in the face. As i indicated in the book i felt like a grownup. I was a little boy that had a paper run and i would take my few dollars in the bank and go to the teller and hand them my few dollars and that grownup, the teller would take the information and write it out and that made me feel grown up. That was a feeling i got that nothing else was replaced. So to make a few dollars to put in your bank account is probably the most important thing of my life. As a young man. They never encouraged me to play sports, so of course my parents were raised in the discussion. A lot of times you have a different attitude on what you should do with your work and with your dollars. The host you talked about the great freedom and responsibility. That feels like such an american concept to me and and admire double concept. Guest i always did feel responsible to my family, to my mother especially. I didnt want to disappoint her and do things that she would consider to feel embarrassed. We did feel we had a certain place in the community and we needed to work to maintain that. So, although i had no idea of what was happening to me at the time as i look back now, i can see that i always knew that i should be responsible and i knew i had the freedom to go anywhere and do anything. Ten q. So the viewers the story from generations back . That seemed to be a seminal moment. Guest it was a great blessing to learn. My grandfather was a successful partner in nebraska in a small farming town and being a successful person in the community meant the roads you plow horse trader, the hogs that you raised got fatter and of course the other thing is the church in that small town offered the first pew to the family that gave the most and the second most and things of that sort. My grandfathers family always had the front. They would buy a new car every couple of years. My grandfathers mother had married a banker, and this is before regulations or anything of the sort. You got your money and risk and put the Interest Rate but your thoughts with be something to give you the adequate reward to risk that they were taking. But he then had access to capital. So my grandmother wanted to leave each of her children of farm. After the first world war, farming was a very successful business. It took a dip with an extra supply in the market in the market grew as the economies around the world grew and had the demand for the Agricultural Products produced and so during the 1920s, times were good. My grandfather had a farm on which they had a mortgage and as soon as they had some equity in the farm they borrowed for the next cave. They had equity again and so they built and inverse paranoia that and everything would have continued the same in would have been just wonderful. But we went into the depression. One of the things my grandfather did do, his dream was to be a cattle operation to him and his son so the dream was to have on the side of the barn a sign that said clarence andsign but before they ever got very old, he bought this bull. It had a disease. I cant remember, tuberculosis or food and mouth disease. But it was a very prized bull and when he brought it home he had a party and invited all the neighbors in to see and there was a number of tables taken from the house and put out in the yard and then everybody got some food for the tables were full of food and people would play games that they could make up. One of the games i was told was the men would bet on how many they could lay on the back before one of them started to fall out. So, my grandfather was in his heyday. This was the peak of his career because he was able to show off and think about the benefits that he could have in using the bull to make his herd gets better and bigger as far as the type of meat they would produce. Then the states took control and it was before the current science new how to handle it so the whole herd had to be destroyed and of course he didnt have the money to make a payment on the loan and everybody lost their farm. It was also before the days of social welfare so they moved to Nebraska City to go to work in the packing house. He had a nervous breakdown so he never did work after he lost the farm, and my memories of him are sitting in a rocking chair just looking out the window. His sons are old enough to go to work and his daughters went to work so the whole family went to work to support their family. There is this man that had a very Strong Social position while he was a good farmer to move into a house in Nebraska City they rented the least expensive they could find. It was very much a come down and it was a hard time for the family. They never did recover. It had a big influence on my mother and she told me the story many times. Host did you take a lesson from that story . Guest i have to say to myself dvd to fail. Be ready to lose all of your dreams and start over. And in fact ive got a website and one of the entrepreneurs in that website that i enter said entrepreneurs are different. We fail and when we do, we get back on the horse. So, as an entrepreneur, youve got to understand eight out of ten new businesses fail and the risk is quite high but if that happens if you are really a mantra nor can you get back up and try it again. Host another important moment if i get this right is the whole story of the buzz saw in your fathers business and witwith that taught youwould tae importance of innovation and technology. Guest it is an important part of the story and i started out and pointed out how important it was because after we were successful with technology around the turn of the century, everybody thought i understood technology and the understanding of technology is that about me to be successful. That image is where my mind we went. My mind went right back to that afternoon we were so pleased about how much construction they could give that. Host is this the idea if you dont know how the car engine works, you just have to know what it can do for you . Guest thats correct. Same thing. Host it seems technology was always a hurdle that you are trying to get over and you thought you had a decision that would be obsolete by the time you implemented it and a lot of money was spent and a lot of people struggled through trying to figure out the technology and it was as simple as the innovation of having people be able to dial a phone number to make fair trade as opposed to doing it sort of automatically. If kind of let you down and you were behind the eight ball all over again. When we had a trade made, we recorded in the book and put it on the ledger that went into an alphabet system so its just right out of Charles Dickens it didnt take us long to learn we could not continue to do everything by hand and expect the business to grow and of course we all wanted the business to grow and we saw that opportunity. So we have to have some sort of an automation come in to help us out. They gave us a tell a time machine which is a big typewriter the clerk would type in all of the activity for the day. The trade was made, the money received, things of that sort. And the machine then had a tape and we would then set the telephone and a holder and it was fixed up to the holder so that it would give information to the computer in philadelphia so we were in omaha and if you add some static on the line, the information was incorrect. So, the company in philadelphia would receive the information that we sent, process it and print it out in chicago. All of that was to happen overnight. Very seldom did it happen overnight. There was a snowstorm or something preventative. They would pick up the mistakes and get it corrected so it is much more efficient but there was also a lot of opportunities for us to have mistakes and in some ways it was very inefficient because we were ready to do the business of the day which is to answer the telephone and not have to spend our time trying to go back through the business we did two days ago in the current years. Ive got to tell you i am very happy that we had it. It was a good stepping stone that we realized we needed to have our own system. These things came into being and of the world wathe world was coy different at that time than it is today. If anybody thought that they were going to build they would have said you were crazy and basically i have never taken this huge risk the fact that you could even get this done was amazing. So when i started thinking about all these things i was amazed. It was done in the ways that demonstrated he could do other things other people couldnt. They were going to ask a question . We would be in the technology where we are now where he essentially called on via the internet website interface people feel good about it and they are confident. Have you ever imagined . When we started to have that the objective was beyond our imagination. Nobody had the concept that you could do that. Years later when we could execute and report execution within six seconds it was truly remarkable for our point of view. So everybody had to build the systems so that they would pull through from the customers keyboard to the exchange and back that was something to me that was remarkable that we didnt dream it or have any concept that that would have been. So, i if thats what did it r you . Guest i wasnt excited about where my career was going and since i had been a reporter i knew i wanted my own business but i didnt have any capital or any way to get any capital. So, being a commissioned salesman was the next best thing to happen. And at the time that i went through the story seeing the cover of the magazine was a full market and they were making a lot of money and so thinking that i could have the opportunity to put in my pocket by own compensation relative to the commissions job and do it in a way that is related to the securities market, the investment market was a most attractive i could get. So i went to omaha to apply for jobs and i didnt have a degree and all the managers that is we dont even look at somebody without a bachelors degree. So that is when my wife and i sat down to map out how much we need to take care of the family and could go to work to make that money and go back to school. And then went back to college t