Posted: Monday, February 25, 2008 12:00 am
Newcomb tells tale of hard work, perseverance
By Matt Neznanski
Gazette-Times reporter
E-Trade co-founder and Oregon State University benefactor Bernie Newcomb told a tale of perseverance that saw him through to the success of his company and eventual wealth.
"My story is just absolute stick-to-it-ivness," Newcomb said. "We were a 14-year overnight success story."
Newcomb was the featured speaker at Thursday's Speakerlunch event, a monthly pep talk for area entrepreneurs.
Born and raised in Scio, Newcomb is a founder of E-Trade Financial, an online discount brokerage where investors can trade in financial markets on their own computers.
Newcomb graduated with a business degree from Oregon State University in 1965 and soon took a job programming payroll computers at the Hanford nuclear site in Richland, Wash.
He eventually ended up in the Bay Area, surrounded by those who would form the Silicon Valley in a few years.
"My house was just down the road from Bill Hewlett. That was just a quirk of fate," Newcomb said.
In 1980, he met Bill Porter, with whom he founded TradePlus, an early version of the electronic trading company.
The company spent years tied to stock brokerage firms, where they had been computerizing the brokerage process of getting stock quotes and cutting the time the companies needed to spend on the telephone.
"It was popular with the discount brokers, but it was a test for them," Newcomb said. "As soon as they saw that it worked, they'd create their own system and take all our customers."
Soon, Trade Plus was able to start its own brokerage, allowing it to act directly between individual traders and the market.
This was in the early 1990s, about the time Americans began to embrace the burgeoning Internet.
"When customers found out they could do it themselves without all the commissions, they started flocking to us," Newcomb said. "We were the first 'e.' If we were 'G-Trade,' I figure there would be 'g-commerce' and 'G-Bay.'"
By 1994, the company had revenues nearing $11 million and went public in 1996. Soon after, Newcomb gave 200,000 shares of E-Trade stock to OSU, valued at $6.1 million.
The gift was the largest gift of private stock ever made to the university and created two new endowments in OSU's College of Business.
"That's been a great part of all this," Newcomb said. "I'm sure a lot of people looked out for and took care of me that I don't even know about."
Newcomb also donated a new stadium and track for Scio High School, and has made contributions to the American Foundation for the Blind.
Born with congenital cataracts, Newcomb is legally blind. He was awarded the foundation's Helen Keller Personal Achievement Award in 2006.
Late in 2007, E-Trade lost $1.71 billion and faced a sharp decline in customers after fears the firm would be hurt by problems in the mortgage market.
Newcomb hasn't had ties to the company for almost a decade, he said. But portions of his original programming remain in the guts of E-Trade's system, despite several revisions.
"It's hard to believe something I coded in the '80s would still be around in 2008," he said.
Matt Neznanski can be reached at 758-9518 or matt.neznanski@lee.net.