Ilya Fushman talks moving to Kleiner Perkins and what he hopes to accomplish

Fushman was recently a General Partner at Index Ventures and before that spent four years at Dropbox

Investor interview by Steven Loeb
March 9, 2018
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Earlier this week, it was announced that Ilya Fushman, General Partner at Index Ventures, was moving to become a general partner and managing member on the leadership team at Kleiner Perkins.

While his time as venture capitalist has so far been relatively short, having only been with Index since 2015, it has already been distinguished. Fushman has invested and held board positions in companies such as Slack, Intercom, Optimizely, KeepTruckin, CultureAmp, Built, CoverWallet, Scratch, and Nova Credit.

Prior to Index, Fushman had been at Dropbox for four years, where he helped build out the core Dropbox product, Dropbox for Business, and the developer platform. 

I spoke to Fushman about his big move, why the timing was right and what he hopes to accomplish in his new position.

VatorNews: Why is Kleiner Perkins the right firm for you? How do your views on investing align with theirs?

Ilya Fushman: Taking a step back, if you think about venture capital and you think about the history of venture capital, I think Kleiner Perkins is really one of the foundational firms in venture capital. If you go outside of the Bay Area and you ask folks if they know what a venture capital firm is and if they've heard of one, I think Kleiner Perkins will be top of mind. That's because Kleiner has backed companies like Intuit, Amazon, Google, Netscape, been the really first money into those companies, and these are the companies that started and built major industries that people use. The firm such a rich history and that's something that's unique and really a unique opportunity for me, so that's how I thought about it.

I've known the firm for a long time and really the conversation started with Mamoon Hamid, who came here just over six months ago now. Mamoon and I were co-investors in Slack and Intercom and a few other companies, and we built a relationship through the past three years working together on those companies, sitting across from each other in the board meeting. I always felt like we were very aligned in our thinking about how to build companies and solve certain problems and so we developed a relationship outside of the boardroom as well. We spend a lot of time talking about, if we were to build an ideal venture firm, what would it look like? Really very recently Mamoon pinged me, reached out and said, 'Hey, let's go build the firm that we've been talking about.' We had a pretty short but intense period of spending time thinking about that, me meeting the rest of the team here, and it all came together and made a lot of sense.

To answer your question of what that looks like, for me, to be competitive in venture today, you really have to have two practices under one roof. You have to have an early stage venture practice, one that does everything from seed investing to more traditional Series As and Series Bs, and then compliment that with a growth practice that is very good at growth investing. That way you can pick up those early stage portfolio companies and power them with capital and help as they go beyond the early stage, and also be opportunistic outside of portfolio and find great growth.

VN: It sounds like you were thinking about starting your own firm. Why didn't you go down that route?

IF: It wasn't an immediate thought but that was always a long term thought for me. If you think about starting a venture capital firm, you need partners, need access to limited partners or capital, and you need to have a platform that has a brand. Here I have a great partner in Mamoon, I have a partners in Ted Schlein and Wen Hsieh and Eric Feng on the early side, and partners Mary Meeker and Noah Knauf and Alex Kurland and Mood Rowghani on the growth side. There's a great set of partners, there's access to limited partners who have been with the firm for 45 years, and there's a brand and ecosystem that's been built around this firm for 45 years which are unparalleled. So it's really getting best of both worlds.

VN: Why was now the right time to make this move?

IF: When I started Index we were quite small here on the West Coast; Index has a big presence in Europe. One of the reasons I came was to help the firm build its practice in the Bay Area and in North America. We grew the team quite a bit; it's around nine or 10 folks on the investment team here, a good amount of support folks around business development, marketing and PR. In terms of team, the portfolio that we built together, they're very robust and a similar size to that of Europe, so, over the past three years, I felt like I helped the firm really establish its footing, get to a really great place in terms of the team and the portfolio.

You know, it's never an easy decision, but for me the opportunity to work with Mamoon, to come and build the next chapter at Kleiner, was something that I had to jump on.

VN: If I understand correctly, you felt like you had accomplished what you wanted to do at Index and that now you could move on?

IF: Obviously there’s always a lot more to do, but I felt things are in a really good place. It's never easy to leave firms and folks and companies behind, but for me this is such a unique opportunity and such a great opportunity that I had to take the jump.

VN: How do you expect your work at Kleiner Perkins to differ from what you had been doing at Index?

IF: I think it will be quite similar in many ways. In terms of building, I think we're definitely looking to build out and scale out the team here, certainly on the consumer side. We are looking to really grow everything.

On the investment side, for me, I think it's going to be a little bit of the same, although a little bit more early stage focused, but I'm still looking for companies that build a great product, that find their way into businesses and enterprises through novel go-to-market models, and that have marketplace potential and maybe do it in industries that are typically under served. The last time we spoke, we talked about KeepTruckin; certainly things like that, and companies like that, will be on my radar here. 

VN: You will be investing in enterprise software and infrastructure, financial services, and industries undergoing digital transformation. Are these new areas for you? What are the opportunities you see in these spaces?

IF: Those are all investment areas that I've been spending a lot of time on. I think the opportunity set is still the same, it's pretty straightforward: I think there are large industries out there where the basic workflow is either pen and paper or Excel spreadsheet and e-mail. So building great tools that take big chunks of workflow, or multiple pieces of workflow, in those industries and build dedicated software for them.

That can be a product like KeepTruckin or a company like Built that I invested in, which is doing construction finance, or a company like Nova Credit that's going after building credit scoring and credit for people who come here from overseas, or a company like Pilot, which is building a next generation technology-enabled bookkeeper. These are all examples of large chunks of industry being replaced by dedicated tool sets and really building a much large entity in those that haven't been built before. 

VN: Tell me about your background. How did you get into venture capital? Is this something you've always wanted to do?

IF: It's an interesting path for me. I was originally born in Russia, actually it was still the Soviet Union then, immigrated to Israel when I was 10 for a year, spent two years in Germany after that, and then came to States. I went to middle school and high school in New York City. We moved around quite a bit because my dad is an academic, he's a professor at the University of Maryland, and my mom academic, she's a doctor and a PhD in computer science and is now at the National Institute of Health, so academia was something that I always thought about and wanted to do, so I went down that path. I went to Cal Tech for my undergrad in physics, I came up to Stanford to do my PhD in applied physics.

To me, the appeal of academia was always that you could build something truly novel that didn't exist before and you could really take a small team of people and power them with creativity and really have a shot at transforming the world. That's actually something that is what's appealing to me about venture capital.

I finished my PhD, I went into an early stage startup with a bunch of my PhD colleagues. We built solar cells, we actually built the world's most efficient solar cells, and I learned a lot doing that. I wound up doing a little bit of a stint in venture capital afterwards, and then went to Dropbox very early and was there from about 50 to 1,500 people and had the opportunity to run the product organization there. I learned a lot by doing that and then coming back to venture has been really rewarding because I can apply that know how around building companies to help multiple small teams with great ideas really take their view of how the world should work and empower them. That's been a constant thread for me, building these new things that are transformative to the world and now I'm able to do it now at a bigger scale than I would have been able to do as an individual in academia.

VN: Looking down the road, maybe five years from now, what do you hope to have accomplished as a member of the Kleiner Perkins team?

IF: We have an opportunity to be the top firm in the world. We've been there before and I think everybody who's here is really here to do that and the way we do it we find those great entrepreneurs and we help them bring their ideas to life. That's a pretty simple statement but a lot of hard work goes into that and it takes having a great team here that's really humble, entrepreneur focused but, at the same time, mean and lean. That's what we're trying to build. So step one is to build that team, and obviously there's already a team in place here and we're just adding to it, and then finding those great investments and, hopefully, five years down the line we have an incredible portfolio of early companies that we've backed from the venture fund and that we've continued to invest into our growth fund that are top of mind consumer business brand that are changing how people live and work.

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