I discovered a new perspective on the fascinating story of ICE's birth as an exchange, this time from an interview with one of its founding executives. We begin in Florida in 1996:
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Edwin Marcial was 5 years out of college working as a software engineer for Harris Corporation in Melbourne Florida. In early 1996, he starts looking for a job where his work will have more of an impact. He ends up at a small energy startup called Continental Power Exchange.pic.twitter.com/h9RclfCZYM
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At the time, CPEX was building a system to trade hourly physical power electronically. Utilities and other energy companies would use CPEX when they needed electricity on a per-hour basis. The business was struggling - cash burn stood at ~$6M per year with a small team.
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Later that year, a power plant engineer named Jeff Sprecher came from California to buy CPEX and become its CEO. To preserve cash burn, Sprecher fired everyone but Edwin's engineering team.pic.twitter.com/tGEumRh6NY
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Edwin entertained multiple job offers to leave CPEX amid the turnover, but Jeff convinced him to stay. He could see the impact of his work, and had more freedom to build when Jeff made him CTO.
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Despite its forward-thinking ideals, CPEX couldn't find any trading partners. No one thought trading could be brought to the internet. That is, until Enron Online.
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In late 1999, Enron launched Enron Online, an electronic platform for energy trading that mirrored CPEX's product. At its peak, an average of $6 billion notional traded on EON every day. Suddenly, the industry saw how the internet could change trading forever.pic.twitter.com/bFkAzqNOOz
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CPEX got its big break when Goldman Sachs came calling. The bank was looking to invest in a platform with a consortium of peers to gain exposure to the electronic energy market. CPEX was the perfect place for the bank's investment. The reorganized company was called ICE.pic.twitter.com/RfFXZMLtwK
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Among the consortium of banks investing with GS was Deutsche Bank and Morgan Stanley, along with energy titans BP and Shell. The group wanted a platform to trade oil, natural gas and power cheaply and efficiently over the internet. Edwin's team built that platform.
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NYMEX, the king of energy floor trading at the time, had an opportunity to get in on the ICE investment but backed out at the last moment. NYMEX passing on the partnership would set up battles with ICE in the years ahead.pic.twitter.com/8jGouVIXct
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Edwin stayed on as ICE's CTO through the 2000s, as the company went public in '05 and oversaw acquisitions to expand into agricultural and financial futures products. He stepped down as CTO in 2014, shortly after ICE closed on its deal to buy the New York Stock Exchange.
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Today, Edwin is a technology consultant and has his own show, called Tech Rides. You can hear his ICE story and more for free on his website. Be sure to also give him a follow
@edwinmarcial19 https://techrides.io/episodesShow this thread
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