Interview with Bill Stenstrud, Enterprise Venture Capital/Muze

Bill Stenstrud is a Managing Director at Enterprise Partners (, a San Diego-based venture capital firm. He's also interim CEO of Muze (, a New York-based digital music company and portfolio firm. Enterprise owns Muze, and also recently purchased the Seattle operations of Loudeye. I spoke with Bill about what Enterprise is doing with Muze, the business there, and also other investments the firm has been doing.

Ben Kuo: For those who aren't familiar with it, what is Muze?

Bill Stenstrud: Muze is a company that aggregates data about music, books, video and games. It's an entertainment information aggregator. The customers of Muze, when it initially was started in the late 80's were retailers who sold music and VHS tapes. What Muze did is it powered a kiosk that fit into Tower Records and places like that, and you could browse for the music that you wanted or video you wanted on that kiosk. The platform was based on a PC. In order to do that, Muze had to develop the capability to keep the data up to date. Everyone on the kiosk was kept up to date. When the world moved to online retailing, Muze's information, and the process to maintain that information, became the mechanism to drive most of the online media stores--everything from Best Buy,, to eBay. All of those firms are acquiring their catalog from Muze. What we did recently is we acquired a company in Seattle, Loudeye, and merged it with Muze. That gave us not only the catalog of information, but also the ability, if the media is digital, to provide the media itself. We now provide not only information about media, but are also now in the business of providing the media itself.

Ben Kuo: Talk about the Muze buy -- seems like an interesting move for a VC firm, in a move looks more like a traditional private equity deal?

Bill Stenstrud: Private equity and venture capital are starting to blur, as the technology business gets more mature. What you're seeing is a need to drive to critical mass. Often, the best way to do that is to aggregate different businesses, in order to have a consolidated business that has critical mass. That's what we elected to do here.

Ben Kuo: I see you are also interim CEO of Muse, along with being a VC. How is that going?

Bill Stenstrud: I do both. I was the interim CEO of my first investment, Rhythms, and also interim CEO of Ensemble in San Diego. I have a practice of going in for awhile and helping to clean up, focus the business, and passing it on to somebody new.

Ben Kuo: How's the Loudeye acquisition going. Are things panning out?

Bill Stenstrud: I think it is. It's always a little too soon to tell, since the transaction only happened six weeks ago. We're very happy with the people who have all decided to stay. They had 54 people there, who we have consolidated with the Muze organization. We're brought the total number of people almost up to 200. We're almost up to a $20 million a year run rate, and Loudeye customers are happy and moving forward. We have a very impressive list of customers in the pipeline. I think it's working out well.

Ben Kuo: Wasn't Loudeye a public company?

Bill Stenstrud: Yes, LoudEye is a public company. To be precise, they had an operation in the UK and an operation in Seattle. We bought their Seattle operations from them. They still exist but only run operations in Great Britain.

Ben Kuo: What other areas is Enterprise active in nowadays?

Bill Stenstrud: You may have noticed within the last week we announced a new partner joining, Kleanthis Xanthopoulos. He will focus on life sciences, together with Drew Senyei. We've effectively doubled the bandwidth of the partnership in the life sciences area. That represents a very serious focus on life sciences. What I have done, after 25 years of investing in and being an entrepreneur in the areas that surrounded the Internet, is I have focused my investments around businesses being created by the Internet, or being severely disrupted by the existence of the Internet. We've invested in companies like vMix, which is a video based community; we have made investments in companies that are generally involved in internet advertising; and I have been focused recently on the media business and how media is being disrupted by the Internet.

Ben Kuo:What's your perspective on the state of investment opportunities in Southern California?

Bill Stenstrud: I think it's very robust. Obviously, in the greater LA area, there is an enormous opportunity surrounds the general area of media. That's a very exciting area. We continue to have good wireless opportunities. I'm on the board of company in Orange County called Quartics, which is building a space shifting technology for media in the home, it's a semiconductor company. And clearly, there's an enormous cluster of life sciences opportunity in the San Diego area. We're very bullish on Southern California.

Ben Kuo: Thanks!


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