Ellis founded Greenwich Associates with $3,000 after he left Donaldson, Lufkin & Jenrette and with a small team of 10 people. His goal was to create a financial industry consulting firm that would become a go-to resource for the biggest fund managers and Wall Street firms.
For the first year, he crisscrossed the country, visiting 90 cities, selling his idea of providing benchmarking data to financial services firms about how well they were serving their clients and how firms' compared with each other. His insight was how rarely clients told their professionals what they really thought and how much value he and others like him could bring by doing thoughtful interviews and offering analytics based on them.
The insight proved powerful—Greenwich Associates grew to employ nearly 400 people during Ellis's leadership—but it took a while to get it off the ground.
"Going to bed at midnight, I set the alarm for 4:30 and then I would get up and get going again," he said. "When I flew into a city, I'd get into the taxicab at the airport, and I'd say to the driver: I'm fine. I have not had anything to drink, but I am exhausted. May I lie down on the back seat of your cab, and will you wake me up if I fall asleep?"
About two years after he founded the company, it ran out of cash. "By then, other guys had joined the firm," he said. "I was responsible for them."
Ellis had to borrow against securities owned by his brother to keep the firm afloat. It wasn't the only crisis in the firm's history: The 1987 financial services contraction laid bare the fact that the firm needed to downsize by about 10 percent. The partnership gave employees one month of pay for every year of service. "We said to everyone, this is our fault, not your fault," he said. "Two or three people rejoined the firm later."
Today, Greenwich has six offices spread across the U.S., Europe and Asia, and a client base of more than 250 banks and fund manager firms, plus more than 50,000 corporations and institutions that take part in its research offerings.
Ever rational, he steeled himself to retire when it was time. He'd told his partners he planned to leave in three years but hadn't quite been able to let go. Near his self-appointed departure date, he found himself overruled on a key personnel decision. Swallowing his pride, he let it be known to everyone that he had been overruled and stepped aside.
"The partnership had to come before everything," he said.
Now a counselor to many young people through the courses he still teaches at Yale, Ellis is sometimes asked by students whether they ought to become entrepreneurs. He laughs lightly as he tells this story:
"I look right at them and say: 'Don't do it.' And if they blink, I know I'm right. And if they look like they're going to hit me, I finish the sentence and say ... 'Unless you really want to.'"
"If you can be stopped by someone saying, 'Don't go there, there be dragons,' you won't have the ferocious unrelenting unstoppable attitude it takes to make other people change their behavior."
These days Ellis spends a lot of his time teaching and educating retail investors about the biggest financial challenges they face today. Here's how.