the Motley Fool Inc. - Early History

EARLY HISTORY

After graduating from college with English degrees, David and Tom Gardner, along with Rydholm, teamed up to write a newsletter that mixed humor with investment information. The Gardner brothers had been exposed to their father's laid back and humorous philosophy toward business and investing throughout their childhood, and that set the tone for the newsletter. The Motley Fool name stemmed from Shakespearean literature and was based on the concept that only the Fool could speak the truth and go against what was the norm, without being beheaded for his ideas.

Using wedding invitation lists from friends and family, the trio mailed out their first issues in hopes of securing subscriptions to their fledgling publication. After receiving only a few dozen orders, the partners began to realize that marketing and selling a publication was not an easy task. The Gardners, who had been answering investment questions online via their Prodigy account, decided that utilizing the Internet would give them access to customers across the country. The pair began using America Online (AOL) to advertise their newsletter and solicit investment questions from fellow AOL members.

The Gardners' big break came in 1994 when AOL invited The Motley Fool to become a featured part of its home page. Using funds secured from the contract with AOL, the company moved into an office in Alexandria, Virginia, and established the "Fool Portfolio." AOL members were then encouraged to use the stock portfolio as a learning device and were able to track The Motley Fool's investment successes and failures. The Gardners' laid-back approach to personal investing gained in popularity rather quickly. Their habit of making public appearances wearing suits and jester hats garnered industry attention as well. The Motley Fool's unconventional mission—to educate, enrich, and amuse individual investors around the world—soon earned it a leading position among online investment forums.

The company's focus on the individual investor was also a key factor in its success on the Internet. By 1996, the company's investment forum on AOL was securing 275,000 visitors per month. According to a 1996 Computerworld article, "The Motley Fool founders have become cult figures because of their investment philosophy, which pumps up the abilities of individual investors instead of the powerful investment establishment of brokers and firms." In April 1997, when its contract with AOL expired, the company developed its own Web site. By then, it was offering its investment advice to over 500,000 surfers each month.