Karthik is the founder of Ignition. He’s not only raised $5 million for his latest venture but his product has also just been launched on Product Hunt.
It’s August 2012. And Karthik is working for The Knight Capital Group.
This was one of the largest market makers. With floor traders that had around 5% of the market share for all equities traded in New York.
To say they had a large order flow was an understatement.
It was 9 am in the morning. And Karthik was on the trading floor. They’d had a software update that was going to assist with a new order type for the New York stock exchange.
As algo-trading systems kicked in… they started buying millions and millions worth of equities.
The team was running around the trading trying to work out which system had gone rogue. The new software had a bug.
And before they knew it, they’d accumulated $2 billion in equities.
The company was only worth $1 billion.
The problem was out of their hands, but the bug in the new software had bought the shares — so they had to pay for it.
Within around 30 minutes, The Knight Capital Group was almost bankrupt.
Karthik was frustrated and angry. His work was everything to him. And now it was gone.
How can you even begin to maintain a healthy mindset in this situation?
What are the learnings from the biggest trading loss in the history of Wall Street?
Karthik took two big learnings from that day at The Knight Capital:
- Allow teams to contribute to their timelines
- Have air-tight processes in place
It’s easy to blame the team who didn’t test the software, but this ignored the bigger picture.
In those terrifying first moments when they realised it was a bug, one thing was clear — the engineering team didn’t have time to do thorough testing.
When the pressure is on in an industry like trading, leaders ask for things yesterday — and important steps are often skipped to accommodate them.
Although a very extreme example, The Knight Capital story teaches a valuable lesson in making sure your workers have a say in when things should go live.
But perhaps the biggest outcome from this story was the products and processes created to make sure it never happens again.
New automations and the kill switch were implemented to create a safety threshold on the amount purchased and price changes on the main exchanges..
The introduction of these new features taught him that, if you have a robust system in place, you can experiment with minimal risk.
How can you integrate these learnings to build a healthy mindset around work?
Karthik sees his learnings from that day as a template for all his businesses.
Experiment and play with strong foundations.
And above all, be prepared for things to change.
At any moment, the company could be taken from under you — in his case, this was quite literal.
After his years of experience, Karthik shares how he uses the idea of work-life integration over “balance” to maintain a healthy mindset, and deal with the uncertainty business presents.
On today’s podcast episode, we talk about
- Building resiliency to change
- How different companies adapt to change
- Understanding and building your roadmap for work-life integration
Karthik echoes the teachings from that day with clarity. And shares how he manages the moving parts of business and life while still keeping things human.