“We were in the throes of the industry correcting itself. People I worked for were being put in jail, and dozens of companies I did business with were filing chapter 7 and 11 bankruptcies. When everything’s imploding around you, you start questioning your own beliefs and behavior. How do you deal with those circumstances?“
With a level head, Caruso navigated the complexities, avoiding the traps that ensnared many of his colleagues. With grit and perseverance, he emerged with a new business when the dust had settled.
“One of the biggest ways Booth helped me throughout my career—particularly in the more difficult times—is the analytical and fundamental foundation of true value creation. Not the illusion of value, not chasing the latest idea or fad—but instead really building something that is a long-term platform for intrinsic value creation.”
OUT OF THE ASHES
Caruso embarked on his first entrepreneurial venture by joining MFS Communications shortly after he graduated from Booth, which was in its rapid scale-up phase. After MFS was sold to WorldCom, Caruso was one of the founding executives of Level 3 Communications in 1997. He then served as president and chief executive officer of ICG Communications from 2004 to 2006, where he led the take private of the near bankrupt company. In 2006, Level 3 purchased ICG and Caruso cashed in on the opportunity to start a new venture of his own.
The telecom and dotcom meltdown created a unique opportunity to roll-up fiber optic network providers. Most tech ideas stem from roots in big data—moving it around, storing it, and manipulating it—which is bandwidth; and bandwidth’s underlying technology is fiber.
“The conventional wisdom about the industry was that fiber networks were over built and bandwidth was a commodity, but in order to make money in the industry you had to have a set of fancy value-added services,” explained Caruso. “The premise of Zayo was an unorthodox set of thinking.”
Caruso’s company developed a contrarian point of view. “We felt that the real value of these fiber networks was their very long term durability as the fundamental infrastructure of big data and the cloud. We coined the term Communication Infrastructure and provided bandwidth for those companies that have a tremendous appetite for transporting and processing vast quantities of data.”
In 2006, Communication Infrastructure Investments, CII, was born, and thus the start of Zayo Group—a global provider of Communications Infrastructure services that are provided through its vast international fiber-optic backbone. Zayo connects thousands of office buildings, hundreds of data centers, and dozens of cloud destinations to a high-speed communications network. The client portfolio includes cable TV and wireless carriers; healthcare, financial and adtech firms; cloud, SaaS and big data providers; and web scale content companies such as Amazon, Apple, Microsoft, and Netflix.
“Our customers are fundamentally changing the way we live and work. They need an ample supply of bandwidth to enable these innovations,” Caruso said. Having acquired and integrated 37 telecommunications businesses in North America and Europe since its inception, Zayo now has an 110,000-mile fiber backbone network and provides a full portfolio of network and infrastructure solutions to 7,000 carriers and large enterprise customers. After multiple rounds of private equity and public debt funding, Zayo successfully completed an IPO on the NYSE in late 2014.
“Zayo’s mission is to accelerate our customers’ capabilities to bring freedom and prosperity to the world.”
“I’m fortunate to have a platform in which I can help a lot of other aspiring entrepreneurs. The combination of having the Booth relationship, having a company that provides an essential role for entrepreneurial companies, and a deep involvement in the business community allows me to foster entrepreneurship broadly,” Caruso said.
An active investor and contributor to the entrepreneurial and educational communities in Boulder and Denver, he volunteers and teaches entrepreneurship and private equity at the University of Colorado and invests in accelerator programs like Galvanize and Chicago-based 1871. In addition, Caruso serves on steering committees for Blackstone Entrepreneurship Networks, Startup Colorado, and Silicon Flatirons.
“Diversity and Inclusion are important themes for Zayo,” Caruso added. Zayo and the Caruso Foundation support National Center for Women & Information Technology (“NCWIT”), Greenhouse Scholars, and Booth Women Connect Conference.
Caruso and Zayo’s relationship with accelerators is multifaceted. For accelerators like 1871, the company provides fiber facilities, large amounts of bandwidth, and cloud and data center services to the start-ups as they develop their businesses. For companies like Galvanize, he is an investor.
Caruso also formed Boulder Think Tank with successful entrepreneurs and their investors that reside in the Boulder area to network and collaborate with one another.
“I feel like I’m scratching the surface already in making a difference. There’s so much more that can be done over the next 10 years in spawning startups, promoting inclusion, and mentoring entrepreneurs, and that’s what I hope will be my legacy.”