Innovation/Global Risk 

Bloomberg: The Innovator

By Shlomo Maital

    

 

 Michael Bloomberg

  Politicians worldwide are being reviled, as they prove impotent to deal with the stiff challenges posed by the global crisis and its fallout.  Approval ratings are rock bottom, and trust in government is at historical lows.

   Except, perhaps, in New York City, where Mayor Michael Bloomberg is completing his third term.  True, even his approval rating is not that high – but the one-question poll it is based on fails to capture the wide respect he enjoys through his great city. 

    What is his story?

    Michael Bloomberg was born in Boston, on Feb. 14, 1942. His father was a real estate agent, son of an immigrant, as was his mother.  He studied electrical engineering at Johns Hopkins, where he worked as a parking lot attendant to pay tuition.  Later, he got an MBA from Harvard.  In 1973, he became a general partner at the Wall St. investment bank Salomon Bros.  In 1981, his employer was acquired and Bloomberg was fired.  Ouch!  He took his $10 m. in severance pay and started a company called innovative Market Systems (later, Bloomberg L.P.), realizing that Wall St. and the financial community needed high quality business data and would pay a lot for it if delivered user-friendly and above all, fast!   His first customer was Merrill Lynch, which bought 22 Bloomberg Market Master terminals, as well as investing $30 m.    

    Bloomberg L.P.  now has over 250,000 (!) terminals worldwide. (Notice the unusual legal structure – a legal partnership, usually reserved for law or accounting firms!).   It has over a third of the $16 b. global financial information business with annual revenues of about $7 b.  And Michael Bloomberg owns 88 per cent of it shares! By bootstrapping the business, and using his own money, he has retained a vast majority of his company’s shares. 

    The lesson for innovators is simple.  Is there a service you yourself would buy?  That does not currently exist?  Then doubtless there are many others who would buy it, too.  So move fast and launch it.  

    Michael Bloomberg is said by Forbes magazine to be America’s 12th most wealthy person, with net worth of $19.5 b. 

    Bloomberg has followed the wise rule to seek new challenges.  On Jan. 1, 2002,  almost exactly a decade ago, he became New York’s 108th Mayor.  Initially his approval rating was low. Gradually, with the instincts of an entrepreneur, he won respect – and was re-elected twice. He is now completing his third (and last) term.  As New York City Mayor, Bloomberg has sought to deal with the global crisis by creating technology-based startups.  He recently announced that Technion and Cornell will partner to create NYCTech, a science and engineering campus on Roosevelt Island that ultimately will generate 600 new startups, thousands of new jobs (in construction and high-tech), and billions in new income.  Bloomberg receives the princely salary, as mayor, of $1 a year.  In a city where some previous mayors have dipped their hands deeply into the till, Bloomberg’s personal wealth makes him incorruptible, and is perceived to be so. 

    Many people wish he would run for President. Bloomberg decided against it.                                                     

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