Despite his English accent, Richard Muirhead is Australian and one of three brothers. His family settled in the UK when he was seven years of age and he definitely feels like a first-generation immigrant. He enjoys a fairly robust rivalry with his brothers as well as a native irreverence from his Australian heritage, which does get him into trouble with the English on occasion.
Like most young boys he wanted to both do sport competitively and be a rockstar when he grew up. After college his Olympic sporting dream hit the dust and he did record a couple of tracks with his younger brother Charlie but the rockstar dream was clearly just that, he decided building a business in the Internet was the closest thing. Actually, it was while he was still in the school, he literally fell in love with the idea of pupil’s collaborating across the school’s local area network or LAN.
“The ability to share knowledge blew me away. Same again while in college and the internet was maturing. It was the mid-90s and Microsoft’s Bill Gates was the hero of the hour, beating off the giant IBM. Hard to imagine now that the outfoxing by Gates was seen as a David versus Goliath fight.
“I got really excited about the young impudent software company outsmarting the behemoth that was IBM. Charlie and I decided we were going to build something – we dabbled in all sorts from restaurants to music labels.”
In the end, their first joint successful venture was to solve a problem for the music and advertising industry. At that time in London, large media files were shipped on tapes using a courier’s bike. It was about getting the ‘rushes’ for client review, it was critical but it was also old fashioned. The brothers conceived of an online alternative and dubbed it Media Net.
They set up shop under a funeral parlour on the Fulham Road and basically created a middleware software that enabled high resolution videos to be swapped between members on the network, Media Net, with streamlined billing features. The middleware became the product not the Media Net service and the company was named Orchestream.
Notably the open source, open web, open network space Fabric Ventures operates in now, this was the first time Muirhead worked with open-source software. Their solution had to meet very stringent standards to plug into the telecommunications networks, standards that were called ‘carrier grade’ but this was one of the first times open-source software was used in mission critical, commercial operations.
“The internet was breaking the rules and closed systems were on their way out.”
Orchestream was very successful and turned away offers of up to $10 million to pursue an IPO instead. As part of that process, they were forced to bring in a deputy chairman who not only managed to drive a wedge between the two brothers and make himself CEO but also was then ‘let go’ under a cloud of misappropriation of funds and ‘me too’ style allegations.
“I have a healthy, Australian-dislike of authority, this situation confirmed my views. We thought we were bringing in ‘gray haired’ authority but we ended up bringing in chaos. We were still in our 20s but we’d been through a lot – setting up a business in a funeral parlour, building a business into a 1.5 billion market capitalization, and then removing the CEO in high drama boardroom stakes.”
There is a happy ending though, Media Net merged with another NASDAQ listed company and was bought by Oracle for a market leading product still in broad use today.
“The magic leap is when a number of innovations come together – that’s when innovation can jump by ten x. With open-source software you can have live pools of data and users able to access this data – and weave them together into new services. This is the superpower of the OpenWeb.
“Instead of the closed systems where data is harvested for the centralized platform, open systems allow us to take our own data and share it with say different insurers to get the best deal. It can be used also to collect data on your driving – and perhaps you haven’t broken the speed limit over the past year which might also result in cheaper insurance. In the Web3 can use zero knowledge proof to only share that information which is pertinent.”
After Orchestream was sold, Muirhead was headhunted by Accel Partners as part of the initial team in the new European Office for the storied Silicon Valley venture capital firm.
“That was really interesting as I got a direct insight into adventurous Silicon Valley investing. I moved from network middleware to application middleware – again deeply unsexy cocktail conversation – but I managed to build up a company that employed 100 people and had $20 million in revenue. This was also sold to another NASDAQ listed company, BMC Software, and then I moved into angel investing.”
Bitcoin and angel investing arrived at the same time for Muirhead between 2009 and 2013.
“Building a fund around a this means it’s not just about the money, even though the whole space has sometimes behaved more more like a world casino than Vitalik’s world computer, but you get to double down on doing other things like providing nodes on the network, building software and participating in the community governance. In that way it becomes more like a venture contributor than a venture capital model.
“We like to keep our hand in and spend time researching and reading white papers, contributing to white papers, and building in an open permissionless development environment. This also leads to trusted high bandwidth conversations with other technical founders and to partnerships. Capital is the business model– but contribution opens the door.”
Muirhead was once advised that being an angel investor and writing small cheques was a surefire way to end up dissolute and divorced.
“And I could see that happening. Money just flows in one direction and it takes a long time, but finally you get to the point where you have sufficient capital, other people’s capital, to really leverage your own investments.”
As Fabric, which started under its sister brand Firestartr, matures into its tenth year, its vision statement deeply reflects Muirhead’s ambitions of investing in and building technologies and applications in the decentralized Web3 or OpenWeb arena.
“Our thesis centers on ‘The Rise of the Open Economy’ which constitutes a pendulum swing of power from faceless institutions back to precious individuals and the potential to address many new information network challenges in healthcare, finance, education and work.”
Now that sounds a lot more suitable for sexy cocktail conversations.
