The Fox Network

Baldwin Louie — Mon, 24 Apr 2000 15:00:00 -0700

CATEGORY: Most Innovative B-to-B Executive

WINNER: KEN FOX, Cofounder and managing director, Internet Capital Group

Ken Fox knows an opportunity when he sees one. He was just a ninth-grader in Philadelphia when he spotted profit in snow.

"Instead of just shoveling snow, I shoveled snow and used the money to buy a snowblower," he says. "Every time it snowed in Philly, I made several grand."

Over a decade later he applied that foresight to e-commerce, founding Internet Capital Group with Walter Buckley in 1996. A virtual unknown merely a year ago, ICG is now the biggest player in business-to-business e-commerce, with stakes in more than 40 b-to-b exchanges. The company was 1999's top-performing debut firm, going public in August and increasing in value 27 times by the end of the year. Part VC firm, part incubator, part operating company, ICG fosters the growth of its holdings by providing advice and tech support even after the new firms are up and running.

Fox, 29, recognized b-to-b's potential in the mid-1990s, after a stumble as boss of West Coast operations at investment firm Safeguard Scientifics (now a major ICG funder). Under Fox's direction, in 1995 Safeguard invested $7 million in Nu Millenia, a company that made software for interactive music CDs. Two years later Nu Millenia folded. "It was a neat idea," he says. "But its failure showed us that we're not consumer guys."

Call it the continuing education of Ken Fox. He took to business early in life, reading the Wall Street Journal from fifth grade and absorbing knowledge at the knee of his entrepreneur father, Robert Fox, who ran a cement company and a lumberyard, among other businesses. Fox took his ambition to Penn State University, then to Goldman Sachs, where he was an analyst in the mergers and acquisitions department.

He'll need all his business-savvy to stay on top in the rapidly changing Internet Economy. Recently, investors have cooled considerably on b-to-b - and on ICG. Its market cap has dropped by more than half from a high of $56 billion. One reason is the blizzard of competitors in the b-to-b market; a bigger factor is the newfound enthusiasm among brick-and-mortar titans like DuPont and BP Amoco to start their own online exchanges.

Fox figures ICG's advantage will be its symbiotic network of companies and its experience building and running Internet marketplaces. He thinks ICG's b-to-b formula can be used to start new exchanges in industries around the world.

Financial analyst Henry Blodget has faith in the young Fox. "He's intense, competitive and a very compelling salesperson," says Blodget, whose company, Merrill Lynch, took ICG public. "He saw something big before anyone else saw it."

That clarity of vision will surely prove useful as the business-to-business market grows up - and shakes out.

RUNNER-UP: MARK HOFFMAN, Chairman and CEO, Commerce One
After turning database-builder Sybase into a billion-dollar enterprise, Hoffman focused on the business-to-business market. Commerce One created 38 online exchanges in the second half of 1999.

LAST YEAR'S WINNER: JOHN CHAMBERS, President and CEO, Cisco Systems

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