Monday, August 20, 2001

Cyber Scene Spotlight: Primedia's Phillips Perfectly Poised

Larry Phillips leaned back in his chair and paused as he recollected the milestones of his professional career track. His recent rise to his current position as managing director of Primedia Ventures didn't happen overnight, but it did occur during the fast-paced timeline of Internet-time.

While his spacious corner office is twenty-three stories above Fifth Avenue, his feet are firmly on the ground and on Monday, August 20th we chatted about his ever-evolving role. Having been at Primedia since 1995 and Primedia Ventures since 1998--both divisions he started-he admitted he's had the best of both worlds.

Primedia is the $1.7 billion media company with print, video and Internet businesses that is focused on niche consumer and business-to-business audiences. Some of their more well known brands include Seventeen, New York magazine, Fly Fisherman, Modern Bride and American Baby. They also own Channel One Network and 16 other specialty satellite television and TV distribution services. Their most recent Internet purchase is the popular site, but they own and operate more than an astounding 1000 Web sites and other Internet properties as well.

Larry came to Primedia six years ago from C.E. Unterberg Towbin where he was honing his technology investment prowess. As a junior venture capitalist Larry knew there was a lot to learn about managing a business. Not missing a beat, he began to opportunistically look for an operating role where he could round out his vitae. He spoke honestly and candidly, "there was nothing particular about media that was interesting" to him, but the opportunity to start an online product in a major media company was more than compelling.

When he learned of the new online products division that was being formed at Primedia in 1995, he jumped. During a time when the Internet was in its nascency, Larry was responsible for creating all non-print products and alternative revenue streams for the media company. The opportunity was exhilarating and being an "intrapreneur" was the best of both worlds: He could enjoy the triumphs and travails of an entrepreneur in a typical startup, yet he had the comfort and support of a large corporation behind him. Utilizing both, he built up a team, created new products and made money.

The phrase "you can take a man out of the country but you can't take the country out of a man" comes to mind after you get to know Larry even briefly. Although he was making the most of his time at Primedia's Internet division, his heart was set on venture capital and funding companies, not running them. After three short but productive years, he approached the Primedia board and with majority backing from board-member company Kohlberg Kravis Roberts &.Co., he and Andy Thompson raised $22 million and launched Primedia Ventures. Financially driven, as opposed to entertaining strategic investments, the focus straddles the worlds of media and finance.

Since 1998 they have invested in opportunities with a sound financial plan that take advantage of the unique aspects the Internet can offer. He says that they have looked for plans that opened new markets, offered new services or built new technology products. Of course, based on their unique position of being an investment division in a media business, they focused on products and services that explored and supported new business models for media and communications. Some of their early investments were N2K,, and CD-Rom companies. Today, their focus has expanded to include ASP-based software applications, cable and TV network infrastructure, mobile applications and next-generation digital video businesses.

Larry is quick to point out that while technology is important, a strong management team who can execute their plan quickly and decisively is even more vital in today's competitive market. This is when he launches into his buzz-word packed monologue using terms like: "affinity," "endemic advancements," "erosion," "financial categories" (i.e. niches) with "financial characteristics" (i.e. profitability) and "utilize its resources to increase its profit."

Buzz-words aside, Larry is refreshingly down to earth with his all-American good looks and matter-of-fact, thoughtful business approach to the wily world of media and investments. If anything, he represents a natural approach to VC, in contrast to the usual over-hyped and glossed over presentation of typical VCs. You can see it in his crisp checked shirt and pressed casual pants and his relaxed, unpretentious disposition. It's apparent in his pictures of his son and wife in informal play-time activities from his organized book-shelves.

Don't get the wrong impression, though, this seemingly docile gentleman is as sharp as the next shark and has the schooling and professional pedigree to put the most ferocious VC in his place. This Cornell graduate can program in Fortran and was studying to be a physicist. He worked in engineering for a while, but when those theoretical high-end physics projects were getting canned, he zeroed in on technology and investment. He then took the next step and went back to school for his MBA, graduating Harvard in 1992.

Today, with a proven track record and expanse of experiences, Larry and Primedia Ventures are in a powerful position to help seasoned entrepreneurs with potential to become number one in this volatile market. Their involvement doesn't stop at signing the check, either. They consider themselves a resource of ideas and management support for their companies and take advantage of their connections to other PRIMEDIA companies to leverage business relationships. With mergers like AOL and Time Warner happening, the value of a media business that's in the Internet space, and has been for quite some time, puts Primedia Ventures and Larry Phillips perfectly poised to stratospheric growth.