Six months ago, Stephen Murphy was doling out the corporate funds to line managers. Now, he's on the other side of the desk, doing his best to spend the 115m euros he has so far helped raise.
When I met Murphy at IP Powerhouse's London offices, I asked him the reason for such a turnround. "At Virgin I made most of the investment and divestment decisions with Richard," he said. "I bought things, I sold things and it was a great job. But I'd thought for some time that I'd really like to cross the table and, instead of being the guy who gives out the money, be the guy who runs the business."
At Virgin, Murphy got to know venture capitalists. One of them, CapVest, threw money in the pot when Branson made a bid for a 3G licence early this year. An early backer of IP Powerhouse and its founder Vijay Khakhria, CapVest tempted him. "They approached me and said take a look at this, we think it's a really interesting business, we think you're the guy who can come in and run it." It took him six weeks to decide.
What tempted Murphy was the logic of Internet data centres. It goes like this: ISPs, carriers and ASPs need their servers to be closer to customers as Internet usage grows around the world. For instance, a supplier of supply chain management software in New York can't adequately host its application from servers in America if the users are in Eindhoven. Internet data centres try to answer this need, although Murphy says most European examples are too basic, lacking security and other offerings like maintenance, data recovery, monitoring and reporting.
So what will Murphy do differently from Virgin? Be more organised, he said. Clear accountabilities; charts showing who answers to whom. One of the defining characteristics of Virgin was its sprawl; it rambled. Murphy's law is structure. In fact, when asked to identify his own irreducible contribution to IP Powerhouse, that's what he said: structure. "Many start-ups fail because the guy's sister is the chief marketing officer and his uncle's on the board. You know. There's no structure."
Also, he wants everyone in their lane. "I've seen the everyone-does-everything problem," he said. "You find out that the guy who was supposed to look after customer service was so busy looking over the marketing director's shoulder writing the copy that he didn't do his bit. And that's one thing we do avoid here."
This was first published in December 2000