Ross Fubini of XYZ Ventures on Investing in Company Networks and Understanding Market Cycles

**SPEAKER_1** (0:01)
All CEOs, me included, we don't actually know what we're doing.

**David Paul** (0:05)
They're all sharks, so all you got to do, though, is no shark bait. I don't think we've ever talked about this before.

**SPEAKER_1** (0:10)
We can capture all of the wallet share. First place to start is with the product. That's just the first nut.

**David Paul** (0:21)
This is The Capital Stack. Hey, everybody, this is The Capital Stack. I am your host, David Paul, where we talk to entrepreneurs, founders, operators, and investors about all things, value creation and startups. Today, I am talking to Ross Fubini, who is the managing director of XYZ Ventures out of San francisco. Ross, how you doing today?

**Ross Fubini** (0:54)
I'm doing great, David.

**David Paul** (0:55)
Ross, you were on the founding team that discovered the internet, right?

**Ross Fubini** (1:00)
Not quite the founding team, but yeah, my first gig coming out of school was working for Netscape way back in 97-98.
Netscape was definitely creating the internet at the time. I mean, it's funny, it's even to a degree we just didn't realize, like Netscape to some people is known for its browser. Some people don't even remember it. The first widely adopted internet browser. The thing that was also notable back then is at the time we were creating so many different parts of the internet that we now take for granted. For example, there was a group just down the hall of four people that realized folks we ended up actually selling the business that were the Netscape proxy server, which was essentially the beginning of the CDN business. Now, tens of billions of dollars in revenue. That was just one group. They sat next to the Calendar server, which we thought were going to be a really big deal and weren't. That group was a hop step over from Tim Howes and the LDAP team that really started the Active Directory and identity on the internet. Again, it was a remarkable place to be in because so many things were being invented. The list goes on and on, SSL and cookies themselves. It's really a tremendous place to be building software.

**David Paul** (2:26)
Yeah. You've had a very long career in software. You look great for a guy that's coming up on, what, 30 years in the business?

**Ross Fubini** (2:32)
A lot of years.

**David Paul** (2:35)
Is it the running? Is that what keeps you healthy?

**Ross Fubini** (2:39)
It's definitely a lot of running and trying to keep up with the latest of ideas. In addition, it's just like not breaking ourselves with work, which I know is something you and I suspect a lot of people listening try and manage.

**David Paul** (2:56)
Tell me a little bit about yourself and emerging from being an operator and a technologist, going into the venture world. I think you started your career at Canaan, correct?

**Ross Fubini** (3:10)
A step before that, and actually, so my own background, real briefly, as you're kind of mentioned, my first gig was working for Netscape as a core engineer, and my training as a computer scientist, mostly because I couldn't hack real math and physics.
After that, I was really focused on, I ended up working in some specific set of networks, came out of the Netscape diaspora. So I worked at a company called Tellme. Tellme is a voice IDR company, if you call help on fidelity, now you're still talking to a fidelity, excuse me, to a Tellme system. They came out of the Netscape diaspora. They came out of a company called Plum Tree, which is really incredible. Tellme pool building, early corporate portal software, bringing the Internet to companies. Again, tremendous sets of networks that came out of that. The CEO of Redfin, the president of Atlassian, many, many, many, many talented people. Then I ran a division of Symantec, running some stuff at some scale, along with some really, really talented folks. Then I started a company, built that business that was basically an enterprise version of Facebook, sold that business to SuccessFactors and on to SAP. That was the weird thing for me. This is about 13 years ago now. I then stumbled in the venture. I didn't have the grand plan. I ended up with just a phenomenal opportunity. A guy named Mitch Kapoor, Mitch is the founder of Lotus. If anybody has read things like The Power Law, or anything about the history of venture, Mitch was truly a tremendous part of early venture. He and Ron Conway were basically angels when that was not a thing, and to a huge degree in the case, both of them. So I got to go work with Mitch at KPort Capital, doing early stage investments. Learned so much from them. This is back when Mitch is doing investments in Uber, and then we did Twilio, and Optimizely, and Clever, and Omana Health, and LendUp, and really some incredible, incredible businesses over the years, and economics. Then, finishing my narrative, I went to Canaan Partners. Canaan is a wonderful multi-stage, multi-sector firm. I worked there for a number of years before then, starting both XYZ and another firm called Village Global. Now, running XYZ feels like the work of a dream. I know, it's wonderful. It's really just doing my best work and working with the best people.