Actions of MIT’s 15th president have ‘grown to inspire generations,’ Reif says.
William A. Porter, longtime entrepreneur and founder and chairman emeritus of E*Trade -- one of the world's hottest e-businesses -- and his wife Joan Porter have donated $25 million to the Sloan School of Management toward the construction of a new multiuse management facility. The building will be named the William A. Porter Management Center.
Believing in the power of entrepreneurship to leverage technological innovation, the Porters made the gift to enhance the synergy between the Sloan School's strength in management and the entrepreneurial and technology prowess found throughout MIT. Mr. Porter revolutionized Wall Street with the 1982 launch of the electronic brokerage business now known as E*Trade. He plans to do it again in the spring of 2000 with another startup, International Securities Exchange (ISE), which is already turning the options trading industry on its ear.
"We decided to give one major gift that would have significant meaning for humankind," Mr. Porter said. "MIT is the best university in the world when it comes to science and technology. How can we leverage that technological capability for the improvement of our living conditions? That comes through entrepreneurship. The greatest leverage we could bring about is to enhance the Sloan program at MIT to encourage entrepreneurship."
"With this unprecedented gift to the Sloan School, Bill and Joan Porter have set an extraordinary example of vision and generosity," said President Charles M. Vest. "They have been ardent supporters of Sloan and share our commitment to advance the quality of the Sloan School to be the preeminent leader in 21st-century management education."
The new facility, for which Sloan expects to raise at least $55 million as part of MIT's $1.5 billion capital campaign, will enable Sloan to bring together research, teaching, staff and student functions and activities now housed in multiple locations across the MIT campus.
Additional space will enable Sloan to expand its offerings in entrepreneurship and add classroom capacity to meet the demand for management courses among undergraduates. The school will also be able to take advantage of newly developing instructional technologies.
The Porters' gift sets in motion the process of selecting a site and retaining an architect. Sloan's planning will be integrated with MIT's development of the east part of campus as a whole.
Mr. Porter sparked the digital trading revolution when in 1982 he founded Trade Plus, an electronic brokerage service bureau for stockbrokers, through which the world's first online trade took place on July 11, 1983. A decade later, realizing he could compete with the major brokerage houses, he launched a subsidiary called E*Trade Securities, Inc., to enable customers all over the world to make trades in real time. Today, with a market capitalization of $5.9 billion, more than one million active accounts and more than 80,000 transactions handled each business day, E*Trade Group, Inc., is the recognized leader in online investing.
Now at age 70, instead of retiring, Mr. Porter is hard at work on his next venture -- no less ambitious than a new electronic options exchange, which is already posing new challenges to Wall Street. His new venture, ISE, a $90 million startup that will compete with Wall Street's old floor broker system, is scheduled to begin operations in March 2000.
ISE will become the first fully electronic options exchange in the United States and the world's first option marketplace combining electronic trading and auction market principles. Currently awaiting approval from the Securities and Exchange Commission, ISE plans to trade options on 600 of the most widely owned and popular stocks. Upon SEC approval, ISE will become the first new registered US securities exchange in 26 years.
In Mr. Porter's first startup company, Commercial Electronics Inc., he conceived and developed the first color low-light-level broadcast television camera. All broadcast cameras today have the capability Mr. Porter developed at Commercial Electronics, which was eventually acquired by Warner Communications. Since his first entrepreneurial foray, Mr. Porter has developed more than 20 products and services and holds 14 patents.
"Bill Porter is an ideal example of what a Sloan education produces: an innovator, a builder, a successful entrepreneur," said Sloan Dean Richard Schmalensee. "Beyond making possible new bricks and mortar, this gift from Bill and Joan represents an understanding of what it takes to transform and advance an organization -- an organization they care about very deeply."
The Porters want their gift to support the continued growth and expansion of the MIT Entrepreneurship Centerspecifically and the entrepreneurial spirit on campus in general. "I think there are even greater opportunities for graduates with technology know-how to blend their talents with entrepreneurial vision and the ability to raise funds and make things happen," Mr. Porter said.
In 1996, the Porters established a full professorship in entrepreneurship at Sloan. Mr. Porter also serves on the MIT Entrepreneurship Center's Outside Advisory Board and was a judge of the inaugural MIT Sloan Ecommerce Awards in May 1999.
A version of this article appeared in MIT Tech Talk on November 3, 1999.