Worth profiled Kay Koplovitz in the August-September 1992 issue, our fourth. She was the first person to bring sports to cable; she founded USA Network, one of the first and most successful national cable channels; and she had just launched the Sci-Fi Channel (now known as Syfy), then a new model of niche entertainment, despite naysayers who thought it could never work. In the following years Koplovitz would step in to underwrite Charlie Rose on PBS when it faced defunding by a Republican Congress, and she chaired President Clinton’s National Women’s Business Council.
Media mogul Barry Diller bought a controlling interest in USA Networks for $4.5 billion in 1998, and Koplovitz shifted her focus to investing in women-led tech startups. Her venture capital firm and its associated accelerator, collectively known as Springboard Enterprises, has been one of the most successful technology investors of the past decade, cultivating women-led companies such as iRobot, Zipcar and Crimson Hexagon. Springboard has put 642 companies through its accelerator program, and of those 84 percent have raised capital. After Springboard’s 16 years of operation, 81 percent of its companies are still in business. “There is no other accelerator, of any kind, that can match these numbers,” Koplovitz says. Worth spoke with Koplovitz about the past, present and future of media, technology and women in business.
Q: AS AN UNDERGRADUATE AT THE UNIVERSITY OF WISCONSIN–MADISON, YOU SAW FUTURIST ARTHUR C. CLARKE SPEAK ABOUT SATELLITES AND DECIDED TO PURSUE A CAREER IN THE CABLE INDUSTRY. WHY?
A: I’m very comfortable on the edge of the known. I like the unknown. I like to forge the path. I love working with people. I love inspiring them to deliver inside a company, and I think there are lots of things you can do there.
WHEN DID YOU HAVE A SENSE OF HOW PROFOUNDLY THE MEDIA LANDSCAPE WAS ABOUT TO CHANGE?
In the early ’90s we all knew that digital was coming, but we really didn’t know very much about how it was going to affect us. We knew it was ones and zeros. That was the most sophisticated a lot of people in the media business were at the time.
BUT YOU HAD A HUNCH?
One of the reasons we launched Sci-Fi in 1992 was because I believe science fiction is a window to the future. A lot of what is written in the storytelling of science fiction really does come true. It’s a matter of when. We used to talk into our wrists when we were kids. Today, people talk into their wrists. It’s a simple example.
What I knew clearly was that when digitalization came into force, it would have a profound speeding-up effect on the changes that we were seeing. How that would happen, I didn’t know.
ONE OF SCI-FI’S EARLY MARKETING CAMPAIGNS WAS “IMAGINE MORE.” WHAT WERE YOU IMAGINING?
We were really into the idea that what you imagined, you could create. Internet 1.0, which is at the end of the last century and beginning in 2000 and 2001, came onto the scene with a huge push. Yet it still wasn’t evenly distributed. It wasn’t technologically deep, but we could start seeing the impact. You had companies like Google coming, but nobody knew what search of the entire world was going to mean. This was when corporations were leading the charge on the digital front, and consumers got their education about digital from where they worked.
Today it’s completely the opposite. In the last 10 years we had digitalization all the way through society and the disaggregation of the center of all of the communications processes. Now consumers are smarter sometimes than the corporations they work for.
WHERE DO STARTUPS FIT INTO THAT EQUATION?
Back in 2000 there were a lot of corporate venture capital operations. A lot of them got washed out when internet 1.0 didn’t mature fast enough, and the investments they made during that period after 1990 matured at the peak of ’98, ’99, 2000. Then 2000 was the collapse of the technology market, and that drove down the valuations of those investments. Corporations thought, This is really not our core business.
SO THEY LEFT THE STARTUP SPACE?
A lot of them did get out, but in the last five years, they’ve come back with a vengeance, and corporate venture investing is very big now. It’s because large corporations realize that they are not capable of developing all of the new innovations that are needed. They must incorporate new and innovative companies. The challenge is to incorporate them without killing them.
YOU STARTED OUT BUYING SPORTS BROADCASTING RIGHTS. WHAT MADE YOU GO THAT ROUTE?
I love sports, but that had nothing to do with why I chose sports. It was very easy to understand that movies and sports are the two most popular things that people watch. You didn’t have to be a rocket scientist to know that.
What we really did was create the business model for all cable television networks. We introduced the licensing model and reversed the model of broadcast television so that the cable operators paid us to carry the signal, rather than in broadcast, where they were paying the local channels to carry the network. In order to get revenue we had to reverse that model, and it worked.
I love sports, but that had nothing to do with why I chose sports.
AFTER YOU LEFT USA, WHAT MADE YOU DECIDE TO FOCUS ON FEMALE ENTREPRENEURS?
When I was leaving USA [in 1998], I wanted to re-energize my own process. I didn’t want to keep doing the same thing. That’s when I was asked by President Clinton to chair the National Women’s Business Council, which really—I have to be honest with you—didn’t float my boat, in the sense that I was reporting to Congress on how women business owners were doing. It may be an important thing to do, but I really wanted to create. I wanted to do something that would show results.
IN THE COURSE OF DEVELOPING THESE REPORTS FOR CONGRESS, YOU FOUND A PROBLEM THAT REALLY CAPTURED YOUR ATTENTION.
I saw how much money was pouring over the transom in the late ’90s and early 2000. One hundred and four billion dollars in venture capital in ’99 and less than 2 percent went to women. I said, “We’ve got to change the picture on this.” I knew there were women out there in technology and the life sciences. How were they going to get funded?
SO THAT WAS THE IDEA FOR SPRINGBOARD?
We went out—this was in ’99 and 2000—and decided to see if we could find [those women] and see if we could get people interested in investing in them. I had some colleagues in Silicon Valley who said they would help out. We went out, and we were just really hoping to get like 100 applications [for funding]. No one had ever done this before—tried to put together an accelerator for women entrepreneurs in technology and the life sciences.
“We knew that this was an underfunded, over-performing marketplace.”
WHAT KINDS OF COMPANIES WERE YOU LOOKING FOR?
I wanted to see if we could find companies at the top of the pyramid. They’ve got their proof of concept, they’ve got customers, they’re on their way. Let’s see if we can find them and accelerate them by helping them get the funding beyond friends and family and angel funding.
We had 350 applications on the first call out.
THAT WAS A SURPRISE?
I thought, Holy cow. I knew that this was an underfunded, over-performing marketplace. We ultimately selected 26 companies to present in January of 2000 at the Oracle Conference Center in Redwood City, and over 300 people came to hear the companies present. Twenty-two of the 26 got funded—like four times the national average. I said, “We’re never looking back.”
WHY WAS THE MARKETPLACE FAILING FEMALE ENTREPRENEURS?
Truthfully, the guys. They just weren’t in the same network of people. We all live within our friends, family, schoolmates, people that we work with. And I don’t think there was a belief that women could build scalable and sustainable companies.
BUT THEN THE STOCK MARKET COLLAPSED. HOW DID YOU COMBAT THOSE SYSTEMIC PROBLEMS?
I realized it wasn’t just taking them through the accelerator to have a demo day—goodbye and good luck. That was not going to work. We had to create an entire ecosystem, and I’ve been building that ecosystem for years. It’s over 4,000 experts. We work with companies all the way through to liquidity, and 165 of the companies have had liquidity events, including 13 IPOs. Our companies have raised, now, $7.5 billion in funding. And we add about 50 more companies every year.
IN THE MID-1990S, WHEN YOU WERE AT USA, YOU CHOSE TO UNDERWRITE CHARLIE ROSE ON PBS. WHY MAKE THAT COMMITMENT?
I funded—USA funded—Charlie Rose for $1 million a year for three years. Tom Murphy, who was the head of [parent company] Cap Cities, called me up when he heard about it. He said, “Media comipanies don’t fund other media companies. Are you crazy?”
I said, “No, I’m not crazy.” At the time we were doing 24 action-oriented films a year. But we were also doing a series of antidiscrimination movies as part of an “Erase the Hate” campaign. We didn’t want people to think we were only doing action movies.
BUT THESE KINDS OF PROJECTS DON’T MAKE MONEY.
These people needed to have a voice. It was a time when here in New York the Jewish community and the African American community were at odds. Black churches in the South were being burned down. Congress was going to cut off Charlie’s funding, and he had no idea how he was going to have his program anymore. So I said, “This is a good platform because people in New York, Washington and LA pay attention to the Charlie Rose show.”
THAT SEEMS ALMOST A QUAINT IDEA NOW.
There was a time when you could have that kind of influence.
HAVE JOURNALISTS FUNDAMENTALLY LOST THAT INFLUENCE?
I think they failed in the last election, and that the leading media companies have to bare down on fact checking and digging into investigative journalism again. I have faith in millennials. They have more of an interest in having purpose and working for companies that have values. I find the younger generation to be hopeful