My 9/11: The Aftershock

How quickly the world changed post 9/11, by Philip Letts

My 9/11’ is a three part series to remember the impact on New York during the terrorist attacks. The first in series was a personal reminder of the city under siege. The second part recalled the ensuing days of terror. This is the final instalment.

Two days after that fateful day and the terror that ensued, it finally looked like things might be returning to some kind of normal. I had a scheduled board call with the directors of Tradaq at 11am Eastern time and, somehow, my assistant had managed to get me a seat on the first flight out of New York, leaving that afternoon.

I wandered through midtown Manhattan. I wanted to grab breakfast early, then walk to Central Park where I would catch up with our CFO by phone prior to getting the latest numbers from our New York trading exchange.

Tradaq was a strange Silicon Valley darling. It was a technology company buyout - a rare animal in those days. It had been fashioned by Val Vaden, fresh from founding Vector Capital with the bold vision of becoming Silicon Valley’s first dedicated buyout fund.

He had founded Vector after making his fortune from Benchmark’s investment in eBay where he was a founding partner. To get Vector started he had come up with the idea of creating a business to business version of eBay by buying traditional, regional business trading exchanges and then digitalizing them. It was one of the earlier venture backed physical to digital plays. Turning brick and mortar, Charles Schwab like, retail exchanges into the next big Silicon Valley thing.

A few years later, it seemed he had, against all the odds, pulled it off.

To make it happen he had assembled Silicon Valley’s dream team of venture capital firms, entrepreneurs and advisers, supported by some of Americas largest institutional investors.

A dozen acquisitions later they had created a business that traded across North and South America, led by some well known tech company managers. The CTO was a legend from Sun Microsystems, who invented the Unix shell. The CFO was from a well known Valley bank and the head of strategy a celebrated digital media pioneer.

The company was slated to go public in the summer of 2000 with Credit Suisse First Boston’s top tech team out of San Francisco, led by Frank Quattrone, the infamous Silicon Valley deal maker and the world’s number one tech IPO wizard.

The company was going to set the public market pricing for b2b marketplaces and was pre-valued at over $1 billion. It had been all adrenaline its previous years and the Valley was buzzing about the company’s impending IPO.

Then the dot com crash happened, tech IPO’s ground to a halt and Tradaq’s offering was duly postponed. Fortunately the company had raised a huge war chest with a successful series C financing in early 2000. Once the IPO was postponed the board decided to hire a larger company CEO to drive the scaled platform to wider expansion and financial independence.

They hired a leading search firm in the Valley to scour the largest fintech company’s such as Intuit, Bloomberg and Mastercard. I was approached as I was running Beenz, ‘the Web’s Currency’, one of the largest Internet fintech company’s at the time.

The shortlist included leaders from Intuit and Nasdaq. The board offered me the job. They cited my background having gone from trading floor banker to tech company CEO. They liked my international profile. Each candidate was asked to write a short new vision statement for the company - apparently mine was the most insightful. I remember thinking it was more like back of the cigarette packet material.

I had always dreamed of running a leading Silicon Valley tech business. Who didn’t. I was surprised when they offered me the job, but I could not say no. And one of Bill Draper’s biggest venture capital peers and friends was on our board at Beenz. It was like I was a football player traded from one successful Internet company to another.

I walked up towards 5th Avenue for a third morning in a row. New York was still as empty as the previous day. The horror from the attacks was as raw as ever. The number of victims had continued to climb, by now, towards 3,000. But the word on the street was that there were many more victims still to be counted.

America was in shock. Recession was looming. Armageddon-like predictions had settled into daily conversation. Among reporters, opinion-makers, pr hacks, crisis junkies and their readers the talk was of financial meltdown. Hardly the best conditions to prepare for our much delayed IPO.

I felt for the whole team at Tradaq. They had worked so hard since I had joined them fourteen months earlier. As soon as I got my feet properly under the desk we recruited a new management team to be operations focused. Next we turned a loose coalition of still separately branded regional exchanges into a single brand, business and technology platform. And we slashed costs.

When I arrived the business was burning over $3 million per month. A year later we had hit break-even by doubling revenues and streamlining operations. One of my key hires, a brilliant strategist and I did a forensic analysis of our customer data and we developed national, digital pricing, profiling and performance targets. Then we fed that into our newly built technology platform.

Before 9/11 we were hailed as one of Silicon Valley’s fastest and most effective turnarounds. Business Week was set to make us a cover story.

Then 9/11…

I walked the streets of New York, pondering its fate. Empty, abandoned, the people remaining seemingly falling apart, stunned. It was a scene straight of Will Smith’s ‘I Am Legend’.

As I chatted with our CFO he argued that we would have to postpone the IPO for a second time. First the dot com collapse, then 9/11. You couldn’t make it up. It felt like the company was fated.

Next I spoke with Ray, the head of our trading exchange in New York.

“Phil, it’s brutal over here. The whole team has come into work, but it looks like we’re the only ones in town. None of our clients are picking up the phone. It’s like everyone’s frozen - afraid to do anything.”

Trading revenues were down nearly 80%. It was chilling.

When I finally spoke to the board it was short, sharp and business like. The formal update gave them the news they had long dreamed of. The previous period we had turned the corner towards profit. All the graphs were heading in the right direction. The model was finally proven. All of the years of hard work had paid off.

But trading revenues had collapsed after the twin towers. I could not tell them when they might recover. I had no idea. And I had always been direct and pragmatic with them. The board was sanguine. They had seen many, many previous cycles of boom to bust.

The group predicted that the US would go into another major recession. The double punch of the dot com collapse and 9/11 too much even for this massive economy. Bill Draper, as well as being Silicon Valley’s first venture fund entrepreneur had also been President of the World Bank. He was struggling to remember when things were so bad.

The performance had been so good - and yet the company’s future had never been so bleak. We had little choice but to agree to postpone the IPO once more. Everyone was crestfallen.

I told them I would get back with a new plan in a couple of weeks but that we would need to raise one last private round of equity. It would largely fall on the existing shareholders. They seemed to hint at supporting this fund-raise, with a caveat. We would have to consider selling or merging the business. Bill even floated the idea of a possible IPO in London. After all, it had been less affected than New York.

I wandered Central Park in a melancholic mood. I had successfully steered Beenz through the nightmare of the dot com collapse. Now, just a year later, I would have to do it again with Tradaq. How was this possible? Why me?

My thoughts returned to the present challenge. I had to get the management team together to come up with a new plan and we would have to persuade our investors to back us one last time. And that was that. But they were all on the West Coast while I was stuck on the East.

I had to get out of New York.

That afternoon I nervously headed out to JFK to attempt to get on a plane to London, my next stop. For the entire journey the cab driver kept warning me of the risks at the airport and the likelihood of getting on a plane that day. Apparently JFK was mostly in stop-start mode with rolling security alerts and bomb scares.

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JFK could not be more different from what it had been before. There were police and army personnel everywhere. The security checks were endless. Delays the norm, with a board full of cancelled flights.

The other travellers seemed nervous and confused, muttering about the likelihood of ever getting to their destination. I remained positive - I just had to get to London that day.

Many security checks later I finally reached the gate. I took my phone out to make one last call before I would board the flight. I wanted to let my wife know that I was about to board the flight.

As soon as I dialled the number, the place erupted. The voice over the tannoy barked at us to leave the airport as quickly as possible - it was an extreme emergency. In an instant soldiers and plain clothes police officers surrounded us, pushing us to get to the exits as quickly as possible.

The already anxious crowd exploded into action - not in the least bit surprised. A mass of humans; travellers, airport personnel, airline workers, soldiers and police all sprinted in the same direction. Armed soldiers constantly shouting at us to run faster. Apparently there was a bomb - the airport was getting shut down. We were running for our lives!

Suddenly the terror that all those innocent victim experienced in the hijacked planes, at the twin towers and in the Pentagon had found its way to me. I had experienced fear and threat to life before.

I remembered being trapped in a burning high rise with my wife and baby son, on the West Side of New York just a year earlier. I recalled warlords circling me in Central Africa and that gang, wielding knives, that chased me through the back streets of Algeciras. I remembered being given security staff when my life was threatened at Beenz and when an investor advised it before closing a high profile office with two hundred people in San Francisco. But nothing was quite like this.

The sheer panic of those around me, professionals that must have been drilled for such an event, said it all. I have never run so fast in my life. As we burst out of the terminal, onto the kerb side, I just kept running. I did not stop until I was a few hundred yards away.

When I finally calmed down I called my wife. Thank God I had not managed to connect with her earlier. This was not a must share moment.

The next call was to my mother-in-law. She would finally get her way. I jumped into a cab to New Jersey and the safety of the state’s Senator and his wife.

It took two more days to get me out. We tried everything. Most American airports had remained closed after the bomb scares. My back up plan was to rent a car and drive to Canada, catching a flight from Toronto. Just as we were about to book the trip, my assistant called to tell me that she had finally managed to get a seat on the first flight out of Newark to London.

My in-laws insisted on driving me there. They were more than sceptical about the likelihood of getting me out. They told me that they would wait outside until I was on the flight. If all failed, we had a nice dinner waiting for us back in Demarest.

I waved nervously to them as I entered the terminal. The scene felt like a repeat of the JFK fiasco. Except, by now, we were even more nervous. It took an hour to get through all the controls and checks and questions.

As we nervously queued to board the plane I carefully examined those around me. I was scanning for terrorists. It did not take long for me to figure out that the others were doing the same. It seemed as though there were more air marshal’s than paying passengers. After all, this was the first international flight likely to leave the city.

I had never been afraid of flying. Suddenly I was. I reminded myself that I had flown this red eye to London a hundred times. This was just another flight. My logic did not work. I was sweating profusely - and it wasn’t the heat.

An agonising hour later we finally boarded the plane. I hesitated at the gate, almost turning back. But, before I knew it I was seated at my window seat. I stared outside, praying, yet again, for a safe departure.


It was another beautiful evening, with the sun slowly turning red in the late afternoon sky. Heat shimmered off the tarmac. We jolted forwards, moving away from the gate and onto the runway.

As we left the ground, my heart sank. I stared towards New York, recalling the last few days, remembering all those terrifying pictures and stories of people who lost their lives. I looked over at the altered skyline and the wisps of smoke. Was I just imagining it?

My mother-in-laws words came back to me. “The world will never be the same”. My world certainly was not.

But then again, I had managed to get out alive.

Or, at least, I hoped that I had. Hitting the runway at Heathrow Airport would prove to be the ultimate proof. There was one last sleepless night to go.

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