I'm surprised that anyone else is surprised that I'd be selling software
since that's what I've been doing for the last 15 years.

As with most products, price is determined based on market conditions,
size of market, competitor pricing, etc. If this was a mass-market
product it would be much cheaper. There just aren't that many people
interested in this sort of thing.

I'm a very open person and I don't have anything to hide so I'll give
you the entire story here summarized for your reading pleasure.

A little over a year ago, I determined that it would take a couple of
years more work to build the type of research, execution, trade
management, and back-office support systems that I needed to do
world-class trading. I didn't really have the cashflow to support this
effort on my own at the time.

You're probably thinking: "What happened to those millions?"

More than half went to taxes, about a quarter went to charity and
helping my father out, and the rest went to start various businesses.
The biggest chunk, over $2 million, I invested in my company Sierra
Software Innovations which was subsequently renamed to Borealis.

When I took my company Borealis public, I raised $20 million so that we
could go head to head against Siebel Systems which was a fairly new
company at the time. I had to give up controlling interest to do so. I
subsequently had disagreements with the head of the investment bank who
did the IPO and was on the board. He wanted to bring in a seasoned CEO
because the opportunity was so great (we had a great product and the
market was exploding). The board decided not to do this over my
objections but later changed their mind after the banker's persistent
nagging and convincing of the other board members that we could land a
very well known technology executive as CEO.

It turns out that the investment banker was wrong!  We could only land a
second-tier CEO. This new CEO was fired within six months, after which
the investment banker made himself CEO and proceeded to run the company
into the ground within 18 months. He totally bankrupted it. Took a
company that was worth between $50 million to $100 million when I was
CEO to zero. This was a serious company, we had the VP of Sales for Dell
computer, and the guy who ran Ashton Tate during their runup to the
number one database company, on our board, for example.

While I was involved with the company and just after the new CEO came
aboard I went through a divorce and gave pretty much all of the non-risk
assets to my ex. I still loved her, and we parted on good terms so I
gave her the house, porshe, etc. since I wanted her to not have to worry
about stock prices and the operating risk of my company.

So all my assets were tied up in stock in a company that was about to go
bankrupt. Being a trader, I would have loved to have dumped my stock
much earlier when the downtrend started, but I had one year lockup
because of the public financing so I had to wait. The stock was very
thin once I did start selling so I had to sell slowly over time. I'm
probably the only guy who had stock that sold it all long before the
bankruptcy.

Long and short of it is that I don't have as much as I once did. I'm not
complaining as I'm still better off than most but I don't have $2
million cash to invest into building software for trading.

As far as the timing goes, I have a significant portion of my assets
tied up in my current house which appreciated over 50% in the first four
months after I bought it. The sellers tried to claim I defaulted on our
contract to avoid having to close the sale, they even brought suit
claiming I defrauded them by conspiring with my real estate agent to buy
the house below market even though I paid their asking price without
negotiating. They went to five separate lawyers before they found one
who was willing to bring a suit. All the previous lawyers told them they
had to follow their contract since they had taken my money.

Defending this bogus suit and getting the sellers to close has cost over
$150,000 in legal fees. We recently won the suit, the seller's have
admitted they lied, the judge ordered them to close, and I even have a
written apology from them.

I couldn't fund everything including software development, my personal
living expenses, and the lawsuit with most of my ready cash tied up in
the house.

Shortly after the suit was filed, it became obvious that I'd need
perhaps several hundred thousand dollars to defend myself. I couldn't
even settle if I wanted to because having a settlement in a civil fraud
suit would have destroyed my ability to raise money for trading.

It seemed that a logical way to proceed was to offer the software that I
had been building for my own trading research and operations for sale. I
spent a couple of months getting an interface on it and have been
selling it ever since.

One of the reasons that a lot of new features were added very quickly in
Version 1.5 ( and will continue to be) is because they already existed
in the product. We had to provide an interface for these features and I
only want to sell world-class software so we've spent a lot of time
trying to make it as simple and easy to use as possible to access these
features. But most of the features have been in the product for over two
and a half years.

So there you have it.

- Curtis
Feb 13, 2004 12:13 pm