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SOON after Napster’s launch 15 years ago, in June 1999, the music-sharing service became America’s most talked-about firm, and one of the fastest-growing companies yet seen. Its teenage founders, Shawn Fanning and Sean Parker, were commissaries of cool. But Napster’s glory was short-lived. Record labels pummelled it with lawsuits, saying that its peer-to-peer file-sharing technology, which made it easy for people to pirate music, was as dangerous and illegal as a punk rocker’s drug habit. In 2001 a court ruled that Napster helped facilitate copyright infringement. The firm later filed for bankruptcy and its brand was sold.
Having become the music industry’s Antichrists, Messrs Fanning and Parker have spent the past 15 years trying to rebrand themselves and launch new ventures, with decidedly mixed results. Mr Parker says that having survived the “epic, Greek-tragedy failure” of Napster has endowed them both with “unnatural endurance”. Today he is by far the more famous of the Shawn-Seans, thanks to his eye for business opportunities and stomach for controversy. Mr Parker has made a habit of being bumped out of one company only to pop up in another. Napster’s board pushed him out about a year before it went under. Later he founded Plaxo, a digital address-book service, but was asked to leave by investors. Then he served as president of Facebook, but was again asked to step down, after being arrested for alleged possession of cocaine (he was never charged).
Mr Parker’s involvement with Facebook made him a billionaire. In “The Social Network”, the film about the company’s rise, Justin Timberlake plays him as vain and greedy. But Mr Parker’s boldness has often paid off. When he first heard about Spotify, a Swedish music-streaming service, he penned a long letter to the founder, Daniel Ek, from a bar, spelling out his ideas for the firm. He joined Spotify’s board and helped it expand into America.
Mr Fanning had been Napster’s poster child, appearing alone on a Time magazine cover about the firm. But as the more introverted of the two, he has found it harder to bounce back. He had dropped out of college to work full-time on perfecting the code for Napster, and has a software engineer’s awkward shyness, which made testifying before the Senate judiciary committee to defend the company especially painful.
After Napster folded Mr Fanning tried to start a rights-management service for music, Snocap, but the record labels were not interested, and Apple’s success with iTunes helped to seal its fate. Snocap burned through its cash, and closed. Mr Fanning’s biggest success post-Napster was Rupture, a social network for gamers, which he sold for a reported $15m in 2008. But around a year later he was laid off. In 2010 he was a founder of Path, a social network for mobile devices, which has yet to become socially mobile.
The two Napster founders’ attempts at comebacks illustrate how hard it can be to live up to the ideal of the “serial entrepreneur”. Success in one startup can make it easier to attract funding and talent next time, but it can also delude founders into thinking their firm was successful because of them, rather than timing and market conditions, says William Sahlman of Harvard Business School. Even Steve Jobs of Apple, the most celebrated tech entrepreneur of modern times, did not do well on his second venture, NeXT, which made powerful computers. For Mr Parker, the fame Napster had brought him could also be a liability: when he sat in on a meeting with a record-industry executive to help Spotify negotiate its licensing deals in America, it quickly became about him and not about Spotify. “Did you come here on your private jet? I used to have a private jet before Napster,” the record boss shouted at Mr Parker, with plenty of expletives.
In 2012 Messrs Fanning and Parker joined up again to launch Airtime, a video-chat service. It has not taken off, and its future seems uncertain. However, Bob Pittman, the boss of Clear Channel, a media firm, who serves on Airtime’s board, argues that despite their mixed entrepreneurial record the two men “exert an influence on this industry that isn’t recognised”, offering advice on others’ ideas behind the scenes. Certainly, they were early to spot the internet’s social potential, and its ability to bring people together around shared interests such as music. Napster helped inspire the “sharing economy”, in which software acts as matchmaker for strangers to share or exchange things. Its successes include Airbnb, a room-rental service, and car-sharing firms like Lyft and Uber. Having trained a generation of consumers to believe that music can and should be free online, Napster in effect set the terms for Spotify’s basic version, which gives consumers a limitless online jukebox so long as they put up with ads.
First-mover disadvantage
Napster is, then, another in a long line of companies to pioneer a world-changing technology only for others to make the profits. The phenomenon goes back at least to the printing press, whose 15th-century inventor, Johannes Gutenberg, died bankrupt. From Motorola and the mobile phone to Netscape and the web browser—and, who knows, perhaps one day the list will include Bitcoin and digital currency—history is littered with far-sighted inventors and firms whose followers reaped the rewards of their ingenuity.
Mr Parker says he is now seeing a flashback to 1999, in which the success of a few Napster-like startups in achieving multi-billion-dollar valuations is attracting hordes of youngsters with dollar signs in their eyes but few real ideas: someone recently pitched him a clone of Plaxo, he says. One lesson for such wannabe Parkers and Fannings from their role models’ chequered story is that success is about more than seriously wanting to be rich. But another is that initial failure should not deter them. Aged 33 and 34 respectively, Messrs Fanning and Parker still have the time and the determination to attempt a bit more creative disruption.