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Reply by Ali Aydar, the first non-founding employee of Napster:
There were three distinct phases of Napster, and working on them was different in each.
Phase 1: Hummer Winblad pre-investment (before Q1 2000): At this point we were a small team, made up mostly of engineers. Our CEO was an energetic former venture capitalist named Eileen Richardson, who primarily worked on fundraising. Successful fundraising was based on growing the service. By the time I joined in September 1999, there were only 40,000 registered users and only a few hundred logged in simultaneously at any given time.
There were concerns as to whether we would be able to scale given the technologies available in 1999. Our only focus as the engineering team during this phase was the scalability of the back-end systems to support potentially millions of users logged in simultaneously. It was no small feat in 1999, but our corporate culture has led us to completely exceed everyone’s expectations. We were all very young at the time and very excited about what Napster could be like, so we worked hard and had a blast. And it wasn’t just the engineers, it was also the business side. I remember our first company meeting after I joined started at 11pm and continued until around 2am. We had a room in our office with all the kids including myself, Jordan Ritter, Shawn fanning, and Sean Parker. We were joined a few months later by Jordan mendelson.
We were there all hours of the day and night, sometimes sleeping under our desks as we tried to keep the servers running. To stay awake during marathon coding sessions, nerdy rap or hip-hop would blast through Jordan Ritter’s speakers. We even had cases of Red Bull, which had only recently been launched, delivered right to our office. It was absolutely the best part of the entire Napster experience. Everyone was excited about the future, happy with what they were working on, and free from corporate or legal constraints. The intrinsic value of what we were doing was so high that we probably would all have worked for free. It’s no wonder we’ve been able to overcome significant technical challenges to create a scalable service.
As I have grown and matured as a manager and now CEO, I have come to understand that a good corporate culture is essential to create an environment that fosters the creativity necessary to achieve a breakthrough innovation. This is what we had at the time, and it was just great.
Phase 2: Post-Hummer Winblad investment until the service is closed (Q1 2000 to Q2 2001): The majors lawsuit was filed in December 1999. Things really didn’t change much when the lawsuit was filed, because as engineers we were always focused on updating. scale, and as a business we were always focused on fundraising. Of course, fundraising was a bit more difficult with a trial weighing down on us, but there was still a great deal of interest, and we eventually closed a round with Hummer Winblad. Hummer immediately installed one of their partners, Hank barry, as CEO. At this point, we have entered that phase of Napster’s existence.
Hank (and John Hummer, who served on the board) was completely focused on resolving the lawsuit. Hank enlisted others to help him manage the day-to-day aspects of the business as he worked with labels to try to resolve the dispute. For all of us internally, there was not much we could do. Changes to the products have been minimal, if any, on purpose so as not to disrupt our legal efforts. We were in standby mode.
It was disheartening because we didn’t know what was going to happen and we didn’t know what to expect. Communication with staff regarding the progress of negotiations was minimal, mainly because discretion was seen as essential. We continued to grow organizationally, so it was exciting to be a part of something that was growing. And the service itself was evolving like crazy. At our peak, we had over 70 million registered users with 2.5 million logged in simultaneously at any given time. The statistic that blew me away the most is that the average registered user logs into Napster once every two days. (This is, of course, now completely blown out of the water by Facebook, but for the year 2000, it was staggering.)
Overall, however, this phase was characterized by a lot of ups and downs. We didn’t know what was going on with the trial, and there was a tremendous amount of uncertainty. The uncertainty led to total product stagnation, which was very frustrating for engineering and product management. At the same time, we were growing up like gangbusters, so it was exciting. Then we got the court closing order followed by a stay of the order two days later. It was like going from utter devastation to utter jubilation. The emotional roller coaster was exhausting. Then during the stay we got the $ 60 million investment from Bertelsmann, who at the time was the owner of one of the record companies that was suing us, so we really thought it was all going to be okay. function. But eventually the court decided we had to shut down. Later, several people told me that I had the dubious honor of shutting down all server processes, although to be completely honest I have no recollection of doing so. Repressed memories, I guess.
Phase 3: The Bertelsmann era (Q2 2001 to Q3 2002): After Bertelsmann’s investment, Hank started looking for his replacement. Ultimately, Bertelsmann installed one of its own executives, Konrad Hilbers, as CEO. It was the worst time at Napster, but it wasn’t Konrad’s fault. The truth is, Napster was over, but no one wanted to admit it. It was like trying to blast an old horse with tired legs over a fence. And one of the legs was broken. And the fence was 1,000 feet high. It wasn’t going to happen. Napster, as we knew him, was dead.
The strategy was to try and create a legal Napster, something that works a lot like Spotify does today. But the labels just weren’t going to license a company called Napster in 2002 with subscription licenses. That didn’t stop Konrad and Bertelsmann from trying. At that time, the business was really split in two: the engineering side and the product side versus the business side. The business side said to the other: Just create the service and don’t worry about the licenses, we’ll get them, trust us. The engineering and product side said, Yes, we will build it, don’t worry. But it sucks. It’s not really Napster. And we built it. I have led the development of many systems for the “Legitimate Napster”. And they were all finally ready to ship. But there weren’t many on the engineering side who thought it would work as a product. The world was used to the original Napster, and we had a feeling they would hate it.
It was an absolutely dreadful time trying to build a product you didn’t believe in, 180 degrees from Napster’s first phase. There was also mistrust between the two sides of the business. The business side has always been skeptical about our ability to grow the service, while there was similar skepticism on the engineering side about whether we would get licenses.
In the end, we didn’t get the licenses. But it really wasn’t anyone’s fault – the industry just wasn’t ready for it. It was a dark time. The lesson for me here was that when your gut tells you it’s over you’re probably right, so call it what it is and move on. It would have saved a lot of time, trouble and money.
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