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Profile—Phil Trubey unveils his latest venture even though he could retire today

Plush from the success of Websense, an Internet monitoring company he founded that went public earlier this year, Phil Trubey doesn’t have to work another day in his life.

Yet here he is, back at the job of building another dot-com. It’s his third Internet company , one he thinks has an even rosier future than Websense.

“At the end of the day, it’s fun,” says Trubey, a 37-year-old engineer who was born in Canada. “It turns out that starting and running a company is the most intellectually challenging thing I can think of.”

Trubey’s latest venture is Merchandising Avenue, officially launched last month and a concept he claims will “change the face of Internet commerce worldwide.”

Rather than trying to attract Internet traffic to an e-commerce site through banner ads, the concept reverses the process, putting customized products next to articles visitors are reading, thus increasing the chances of a sale.

Merchandising Avenue sets up electronic breakout boxes next to the articles, called “palettes,” which change in real time. The products, provided by e-tailers, usually have some connection to the article.

For example, visitors to SheNetworks.com, a content site targeting women between the ages of 25 to 35, may see a palette with a variety of cooking utensils or cookbooks when accessing the site’s SheCooks pages.

For every product sold on the site, Merchandising Avenue splits the commission with the content site. Trubey expects revenues next year to hit at least $6 million, while the staff doubles from its current number of 45 people.

Evolving Outlook

No matter what the company’s future, Trubey has it made.

He cashed out a chunk of his Websense holdings, but he’s still the company’s largest shareholder with more than a 20 percent stake. Websense, traded on Nasdaq, had a market cap last week of more than $200 million.

“It’s changed our outlook 100 percent because it’s put us in a position where we don’t have to work anymore and we can do whatever the heck we want,” Trubey says. “We don’t have to strive for the brass ring anymore. We’ve got it. So now the issue is, what do you really want to do?”

For starters, Trubey and his wife, Janet, purchased a house in Rancho Santa Fe and are expecting their first child early next year.

Though clearly a success in his field, Trubey isn’t your typical high-powered, Type A entrepreneur, says Gary Sutton, a Websense board member and a retired CEO of several local tech companies.

“He’s a gentle person, more analytical than hard-charging, and richer than God,” Sutton says. “He’s substance over form.”

He’s also not one to exhibit the trappings of his success. When lunching, Trubey and Sutton more often head for a burger joint rather than hitting some swanky eatery.

Trubey realized his managerial shortcomings when Websense, which he founded in 1994, got to the point four years later when it was ready to go public.

Moving On

He agreed the company needed someone with a lot more experience in taking a company public and willingly stepped aside in 1999 in favor of current CEO John Carrington. But in the process of finding a new leader and determining the firm’s strategy, Trubey and the company’s leading venture capital investors had strong enough differences that he decided to resign as chairman of the board.

Leaving Websense wasn’t that emotional, he says. The one thing that left a bad taste was a bitter board conflict, which caused employees to choose sides.

Although unpretentious and low-key, Trubey has lots of energy and commands respect in the local Internet industry, says Doug Wall, executive vice president of Alitum, Inc., a local infrastructure outsourcing business.

“He is a bit of a geek because he has a thorough understanding of technology, but he’s well-liked and has taken a leadership role,” Wall says, referring to Trubey’s recently being named president of the San Diego Internet Roundtable.

Trubey was one of the organizers of the iLounge, a combination entertainment and business presentation event held earlier this year, and is working to arrange another iLounge at a bowling alley, Wall said.

“The guy is pretty awesome in front of venture capitalists,” Wall says. “He answers questions in a way that they know he’s serious, intense, and he knows his stuff.”

Impressive Credentials

When it comes to showing off tech credentials, Trubey has it in spades.

As a 13-year-old growing up in Ottawa, Trubey was inspired by an article in Popular Electronics to buy a build-it-yourself computer kit.

It was the late 1970s, before the first personal computers were offered on the mass market, but young Trubey was already hooked. He enjoyed programming the machine and realized early on he could make a living at it.

Shortly after graduating from the University of Waterloo (near Toronto), in 1987, he took a job as a consultant for a computer system integration firm, working in three different cities , Ottawa, Palo Alto and Newport Beach. He moved to California to follow Janet, who was pursuing an MBA degree at Stanford.

In the course of his job in 1993, Trubey witnessed a demonstration of a new software tool called Mosaic, which he realized was going to make a huge impact.

“I knew the minute I saw it, this was the evolution of the Internet. This was going to bring the Internet to the mass market.

“When I saw that, I said, ‘Wow, I’ve got to do something with this. I missed the PC revolution because I was too young, but I’ve got to do something with the Internet.”

Finding His Niche

Trubey decided to quit his job and holed up in his bedroom to develop a practical, commercial tool based on the new browser technology first created by Marc Andreessen, who later went on to found Netscape Communications.

At a trade show Trubey attended in 1994, he saw the tool he was trying to make. The anti-hacker, firewall software was much better than his, resulting in Trubey’s signing up as an independent reseller.

In selling the software, Trubey discovered the idea for Websense. Many potential customers were hesitant about hooking up their businesses to the Internet for fear employees would spend too much time accessing sites that weren’t work-related, such as pornography and online chat rooms.

Trubey and another engineer developed the new product that permits employers to monitor and control Internet access for businesses. The new tool was an immediate hit and generated about $100,000 in sales in 1996 and $1.5 million the following year.

In 1998, Websense received $6 million in venture capital funding and was on its way. Last year, the firm had about $8.6 million in revenues and lost $9.2 million. This year, the company turned the corner, reporting a positive cash flow in its third quarter, a full quarter ahead of analysts’ expectations.

Trubey laughs when he hears some may say his success was just a product of being at the right place at the right time.

“I can’t tell you how many times I’ve seen something that someone else created, and said, what a simple and great idea I should have thought of that!”

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