A file-trading ship of fools

The idea for Napster was hatched late in 1998, after Shawn's college roommate told him that it was very difficult to find MP3 tracks online. At the time, Shawn was a "gray-hat hacker" of small acclaim; he belonged to the w00w00 IRC group, where hackers met to discuss their exploits. ("Napster" was Shawn's nickname on the w00w00 group.) In those days, searching for MP3s on the Web was a fool's errand, because many times when a link to a song came up, it turned out that the person who'd been offering that file was no longer online.

Like many others at the time, Shawn set out to build a better MP3 search engine, and he had one great insight -- "presence awareness." This is the tech term for a system that knows when each person connects or disconnects from the group; an instant messaging system, for instance, has presence awareness, while the Web does not. If he could build a file-trading system that knew the status of users, Shawn theorized, there would be a "real-time index" of the files that were available for downloading at any moment. More than that, he devised what Menn calls "an elegant sociological element" to the Napster system -- "it both gave and took away." Anyone wanting to search for MP3s would make his own files available to others. "Like magic, the more people who were seeking music, the more music would become available."

Menn draws his story of Napster's birth from interviews with Shawn, Jordan Ritter, the system's "founding developer," and many others on the w00w00 group, but the question of what sparked Shawn's insight remains unsettled. For all his quotes in the book, the young developer is remarkably circumspect about how he thought up Napster. Perhaps it's modesty, or perhaps he really can't remember anymore, but the most detail we get in "All the Rave" regarding the moment the muse visited Shawn is one scene of a late-night session of furious coding.

Actually, the scene is not about the coding itself; it's about what Shawn was drinking while he was coding, and, in order to show just what sort of person this leader of the revolution was, it deserves to be quoted at length:

"We didn't have any money, and we didn't have Coke left, and I was literally trying to finish this," Shawn says. "And I looked at the Red Bull, and I'm like, 'It has caffeine in it!' I literally went through most of a case that time, and I was up two or three days ... The strange thing about Red Bull is that it has this really weird ability, and it's not just the caffeine, to keep you really sharp and focused, even though you've been up for two or three days. Usually [on caffeine], you get hazy and you're wired but you're tired, mentally not functioning. But [on Red Bull] you can focus, and you can think logically and clearly. You get tired, but usually it just gets you tired to the point where you're not likely to get distracted. You're just kind of a zombie, but you can focus and think, and it helped to do massive amounts of programming where I had thought of the design before, and I just had to do the programming ... By the end of it, I called the cops because there was a car across the street the second night and I thought it was going to do something bad. I remember calling the cops, and they said something about it not being in their jurisdiction, call somebody else. And then I realized I was kind of going crazy."

Shawn was raised by his single mother Coleen, and John Fanning, her brother, had always taken a great interest in Shawn's life. During Napster's peak, John Fanning was often called Napster's "co-founder" in the press, but Menn makes it clear that the uncle had little to do with the nephew's creation. John Fanning's role in Shawn's life was as a generous benefactor: he bought Shawn his first computer, and he gave Shawn a BMW Z3 (though he eventually stopped paying for the car, and it was repossessed). Shawn spent most of his time coding Napster at his uncle's house in Hull, Mass., because his college dorm "was not conducive to work."

It's hard to see how his uncle's house could have been a more professional place than the dorms. The house was the center of operations for John Fanning's Internet firm Chess.net, but rather than see to the business, John Fanning "loved playing games, and he developed a serious habit with a computer video game called StarCraft," Menn writes. John loved to play against Shawn, and "even when Shawn's hacking hobby was starting to look like a serious business, Fanning wanted to play. More than once, when Shawn's friends and collaborators needed him to work, he told them he couldn't: His uncle wanted him to keep playing StarCraft. If he didn't keep playing with him, Shawn told them, Fanning wouldn't give him money for dinner."

Sean Parker, one of Napster's founders, tells Menn, "I'm sure if he hadn't played StarCraft, he wouldn't have gotten fed ... John Fanning has a way of being really stubborn."

"Shawn is like a battered wife," another Napster official says. The boy could never tell his uncle to leave him alone.

Menn uncovers, for the first time, the mismanagement that plagued John Fanning's previous businesses, a trend that followed him to Napster. When Fanning's first business, Cambridge Automation, a computer reselling firm, hit hard times -- which was almost immediately after he purchased it -- Fanning kept it alive by "trying to strike new deals with creditors," which he did in a most unconventional style. "When some big businesses demanded their money, Fanning would call up and sound outraged, insisting on speaking with superior after superior until the creditor gave up and offered new terms." Fanning was fond of lawsuits, too. While he ran Chess.net, he filed what Menn calls a "ridiculous" suit against Sleator Games, one of Chess.net's main competitors -- Fanning charged that Sleator had barred him from advertising on the Sleator site, costing his business $248,000. The suit dragged on until Fanning's lawyers were allowed to quit the case, charging that he owed them $94,000 in legal fees.

With his 70 percent share of his nephew's company, Fanning put together a team at Napster that may have been unrivalled, in all of the Internet boom, in its inability to run businesses successfully -- and that's saying quite a lot for the late 1990s. Yosi Amram, the company's first major investor, had previously founded a news-retrieval company called Individual, but he was forced out from the firm after he began to make a series of expensive acquisitions "unrelated to our core business," one executive at the firm tells Menn. A director at the company accuses Amram of punching him upon being fired, though Amram defends his actions by saying that the person simply "puffed his chest out, and I pushed back." Amram's behavior was so erratic that people at Individual often wondered whether he was on drugs (he denies it) or had suddenly suffered "some kind of self-destructive break."

Another eccentric character running Napster was Bill Bales, the company's first chief of business development, who had founded the online video press release firm ON24. Bales was a cunning glad-hander who had a tendency to be "aggressively flirtatious with female colleagues." Alona Cherkassky, at the time a 22-year-old reporter at ON24, tells Menn that one day Bales told her how nice she looked, then "he mouthed the words 'I want to fuck you,'" a transgression that got him fired. (Bales claims he was guilty only of telling Cherkassky an off-color joke.) In 1992, Bales was charged with driving under the influence -- he had a .16 blood-alcohol content -- and then he failed to appear in court and at a first-offender education program on numerous occasions. One of his former girlfriends also accuses him of abusing alcohol and, in a sworn statement to the police, says that Bales "slapped, bit and restrained her" and "threatened her with a kitchen knife," Menn writes. He was eventually fired from Napster when several engineers said they would quit if Bales wasn't let go.

Perhaps the sanest high-level person at Napster was Eileen Richardson, the company's first CEO. Richardson was a veteran venture capitalist whose biggest success was Interwoven, a Web content-management company that helped turn her VC firm's $3 million investment into $300 million. (Though Richardson, too, had problems at that company; she was asked to step down from the board after it was discovered that she was dating one of the firm's employees.) Richardson agreed to run Napster mainly because she liked the product. She was an "intense music fan," with a "warm, engaging personality," Menn writes. John Fanning, too, liked her: "She's hot!" he told a Napster employee.

Next Page: Everyone at the company ignored any suggestion that the product they were pushing ran afoul of federal copyright laws

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