When asked about their childhood aspirations, many businesspeople will recall the typical kids’ dreams of playing professional baseball or becoming a rock star. Not entrepreneur Ashfaq Munshi. While his peers were warming up their pitching arms and singing in short-lived bands, Munshi was feverishly devising a quantum mechanical model of glass — a prototype that won him the national Westinghouse Science Talent Search competition during his senior year of high school. “I was a full-time nerd,” he laughs.
Roughly 20 years later, Munshi, now 40, is still trying to mastermind a breakthrough technology. For years he worked at management jobs at the blue-chip tech companies, Oracle, Silicon Graphics Inc., and Applied Materials. Then he struck out on his own in 1996, co-founding SpecialtyMD, a sales and marketing channel for doctors. He sold it three years later for $110 million in a stock transaction, to Chemdex (a now dying B2B player that was subsequently known as Ventro, and now NexPrise). At the time, fortunately for Munshi, Chemdex was riding high.
New Beginning
He is shooting for similar results with two companies he helped found last year: Radiance Technologies, where he is CEO, and Vivecon Corp., whose board he chairs. Los Altos, California-based Radiance has raised $13.4 million, mostly from Sutter Hill Ventures and Vanguard Ventures. It makes a content management product designed to handle the delivery of large files over the Internet. Meanwhile, Vivecon, up the road in Mountain View, has raised $6 million from Foundation Capital. It is using the money to produce risk-management software aimed at helping companies devise smarter contracts with their supply-chain partners.
Both startups are just beginning to sign up clients. Radiance has partnered with Tivo Inc., says Munshi, and Vivecon recently signed Agilent Technologies as a customer.
Something to Prove
Launching two companies in the worst economy the country has seen in a decade isn’t for the faint of heart. But one senses that Munshi has a score to settle with some of his Silicon Valley peers. Prior to starting SpecialtyMD, he says he originated the business plan that launched the enterprise software company, Ariba, but that he was “screwed” out of any public or monetary recognition for that early effort.
Certainly, Munshi’s version of Ariba’s birth and the company’s story differ widely. According to Ariba’s founding team, the company was born at Benchmark Capital. A technologist named Paul Hegarty was exploring opportunities in e-commerce as an entrepreneur-in-residence at the firm, where he was introduced to Keith Krach, a former vice president at General Motors and another entrepreneur-in-residence at Benchmark. The two were quickly introduced to marketing whiz, Bobby Lent, by John Mumford of Crosspoint Ventures, and the idea for the procurement services company was allegedly hatched. Lent, Krach and Hegarty ultimately shared the title of cofounder with four others brought in afterward.
Munshi’s version, however, has him working with Lent prior to Benchmark’s involvement. Indeed, Munshi says he backed away — never to be consulted again — soon after Mumford became involved. Inquiries to Mr. Mumford’s office and to Benchmark Capital were not returned for this article. Bob Kagle says he has 'no knowledge of anyone else's involvement [in Ariba's inception] other than Crosspoint.' But venture capitalist Paul Koontz of Foundation Capital says he recalls seeing the plan (Indeed, he recalls meeting with Munshi “at the Double Rainbow Ice Cream Parlor” to discuss it).
“I thought about suing them,” says Munshi, “but I don’t care about those guys. VCs rewrite history all the time, and it looked like a lot of trouble.” But how can he possibly not regret suing for inclusion in the company’s IPO? After all, before Ariba’s share price sank from its highs of $160 to the low single digits, the company’s CEO and cofounders reaped in roughly $150 million apiece off the sale of its stock. Munshi simply says, “I live with the VC community daily, and I need to make sure my relationships are intact.”
He points to his other successes, and insists (as do many entrepreneurs) that he’s mostly driven by the need to prove himself to himself. “I’ve always had the desire to do something on my own,” he says. He talks earnestly about his belief in investing in friendships and people, which he has managed literally by hiring former associates time and again. But Munshi’s trajectory seems, at least in part, reactive. “I’m not going to screw people. I’m not going to take advantage of people and throw them away,” he says.
While he's busily promoting Radiance and Vivecon today, Munshi has one eye squarely on the future, where he sees "vast opportunities" in the infrastructure space, as well as in the areas of genomics, proteomics, nanomachines, medical devices and even the drug delivery space. It could take a while, however, for the kind of bubble that allowed him success with SpecialtyMD to re-emerge.
