Charlie Muirhead: Find a customer and work with them

Charlie Muirhead Rightster
Charlie Muirhead: let your customers guide you

Charlie Muirhead (now 39) is now one of Britain’s most well-known technology entrepreneurs. However, his first entry into the realities of business came from his interest in rock music. Whilst studying for his A-Levels, he became a part-time roadie.

This led to a gap year job at Hilton Sound, which hired out instruments and equipment to bands. His self-professed “geeky side” meant that he quickly became a key employee, managing everything from the company’s software to advising on a management buyout of the firm.

The experience persuaded him to switch from Architecture, the course he had originally planned on doing, to Computer Science at Imperial College London. During the brief time he was there, he came up with three plans for potential businesses.

He focused on one that was inspired by the problems music firms faced in trying to listen to real-time footage of recording sessions. This inspired him to look at how private networks could be managed better. As he points out, at the time (1995) the internet was known as the ‘World Wide Wait’.

Muirhead then decided to follow in the footsteps of other internet tycoons and drop out of university to found his own company, Orchestream. This process did not go smoothly, with most potential backers rejecting him.

Muirhead admits that, “if a 20-year-old approached me today claiming to have solved a seemingly impossible problem, I’d be a little sceptical”. However, he was able to raise £200,000 from respected tech investors Hermann Hauser and Esther Dyson.

While he launched his firm in 1996, it took three years to start winning major sales. Muirhead attributes this to some strategic missteps, initially attempting to position his technology as a premium search engine. However, thanks to a focus on telecom companies as customers, money started to roll in.

Orchestream was buoyed by a further £50m from investors, in the three years to 1999. By then, sales started to pick up. As a result, the firm was able to list successfully on the stockmarket in 2000.

Sadly, after the firm went public, things started to go wrong. Muirhead chose to take the opportunity to step aside in order to focus on other ventures, including an angel investors’ network.

While Orchestream’s valuation soared to £800m at one point, some poor decisions, including an unwise acquisition, saw the value of the company plunge. In 2002, it would be sold for £7.9m. In spite of the fall from the peak valuation, Orchestream performed better than many other tech companies during that period.

At the moment, Muirhead is running an online video marketing company called Rightster, which he founded in 2007. The company listed in 2012 and currently has a market capitalisation of £65m. Muirhead believes that would-be entrepreneurs have to realise that “not everyone is cut out to run their own business”.

This doesn’t necessarily mean that people can’t play an important role in a start-up, just that “there are many ways to shape the future of a start-up, rather than just being the CEO”. He also thinks it’s important to “find a customer who is willing to work with you and use them to help guide your product development”.

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